The difference between the cash value and the premiums paid is taxable upon policy surrender ($60,000 - $50,000 = $10,000). Erin's cash surrender that is taxable is $10,000.
Cash surrender value is the amount that remains after the fees when permanent life insurance policy has been cancelled.
Cash surrender value of whole life insurance can calculated by adding up the total payments being made to the insurance policy and then subtract the fees that has been charged by the insurance company for surrendering the policy.
In short, Cash surrender value is the amount left over after fees when you cancel a permanent life insurance policy.
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