Cash Surrender Value Research Articles

A Note on Life Insurance Cash Values

The present system of allowing the same cash surrender values on any two policies belonging to the same generation is defective because it does not consider the possible differences in the states of health of the two policyholders who surrender their policies at the same age. The injustice towards one who is in poor health is illustrated by the fact that, while he would be charged an extra premium if he purchases another policy, he would not receive any extra surrender value if he surrenders an existing policy. The primary purpose of the typical life insurance policy is to provide for the payment of the face amount at death. Payment of a surrender value is not an inherently essential part of the contract, and may be viewed as an allowance to the policyholder in lieu of a subsequent payment of the face amount. Under this view, the surrender allowance should be equal to the net amount that the life insurance company saves by not having to pay the face amount. This net saving is the difference between (1) expenses and claims, and (2) premiums and interest from the time of surrender to the time when the policy would have otherwise matured. The actual amount of the net saving can be calculated only after the expiry

Taxation. Insurance Policy Cash Surrender Value in Possession of Insurer Is Property of Insured Subject to Tax Lien

Taxation. Insurance Policy Cash Surrender Value in Possession of Insurer Is Property of Insured Subject to Tax Lien

Bankruptcy. Property Passing to Trustee. Insurance Companies Liable to Trustee for Cash Surrender Value despite Loans Made after Receiver's Appointment

Bankruptcy. Property Passing to Trustee. Insurance Companies Liable to Trustee for Cash Surrender Value despite Loans Made after Receiver's Appointment

Taxation. Life Insurance Beneficiary Held Transferee of Cash Surrender Value of Policy at Taxpayer's Death but, under State Law, without Liability to Pay Decedent's Taxes

Taxation. Life Insurance Beneficiary Held Transferee of Cash Surrender Value of Policy at Taxpayer's Death but, under State Law, without Liability to Pay Decedent's Taxes

Comments on "The Life Insurance Company as a Banking Concern"

M XR. J. P. SULLIVAN'S major point is that life companies are in the demand-banking business, subject to loans and surrender value withdrawals, and, therefore, they are in danger during depression periods because investment assets are not likely to be liquid whereas demands for loans and surrender are likely to be large. Accordingly, he suggests that life companies should curtail drastically, if not eliminate entirely, the sale of policies with investment features, if they are to avoid facing the probability of wholesale receiverships during the next period of drastic liquidation. He has not presented a convincing case to substantiate his argument. In his article no evidence is presented indicating that the next depression will be more serious than the present one. He admits that the life companies as a whole will weather this one successfully, but he suggests that the next one will be worse. He does not know (and no one else knows) what precisely will be the character of the investments of life companies by the time the next depression occurs. He makes no allowance for'the distinct possibility that the Federal Government will aid the life insurance companies by making loans during difficult periods. He asserts that life companies will extend their demand liabilities but does not give full cognizance to the attempts now on foot to limit the ability of policyholders to withdraw funds in the form of cash values and policy loans. He gives practically no attention to the rate at which the sales of contracts are increasing and the resulting favorableness of receipts of the companies in relation to their disbursements (including cash-surrender value payments). And, finally, he does not show how the accumulation of assets through the sale of high-priced policies has been a source of strength to life companies, as, for example, in the epidemic-year of I9I8.

Bankruptcy. Property Passing to Trustee. Right to Cash Surrender Value of Life Insurance Policy

Bankruptcy. Property Passing to Trustee. Right to Cash Surrender Value of Life Insurance Policy

The Problem of Cash Surrender Values and Cash Loans

The granting of cash surrender values and loans from reserves is developing into a serious problem for life insurance companies. Originally the surrender value of a lapsed or forfeited policy was granted in the form of paid-up or extended insurance. It was thus limited on the theory that the policy was not a banking contract, that the retiring policyholder having made a contract for insurance, his reserve should only be applied in the form of insurance. In time the abandonment of this theory was forced by competition and the practice of paying surrender values in cash became common. In 1906 this privilege was made a statutory requirement in the new Insurance Law of the State of New York. For the ten years following 1905, the proportion of cash payments to the reserves on the policies surrendered increased 42 per cent. The right of the deserting policyholder to withdraw the reserve on his policy minus a reasonable surrender charge cannot be questioned. The weakness of the present method of expressing this right lies in the fact that the privilege of taking cash instead of paid-up or extended insurance reverses the original purpose of the contract and often encourages needless lapsing. This privilege has tempted many policyholders to unnecessarily surrender their policies to secure ready cash which has resulted in the loss of a great volume of valuable insurance protection. While the return to the original practice of giving paid-up or extended insurance in place of cash for surrendered policies may be classed among the impossibilities, there is a phase of the application of the present plan which demands, and it is hoped may receive, remedial action, namely, the question of the surrender charge. The New York Laws of 1906, under which the bulk of American life insurance is written, and which have been copied in many states, provide that the entire reserve less one-fifth or the sum of two and 54

Bankruptcy: Property Vesting in Trustee: Insurance Policies with Cash Surrender Value Absorbed by a Lien

Bankruptcy: Property Vesting in Trustee: Insurance Policies with Cash Surrender Value Absorbed by a Lien

Insurance. Nature and Incidents of Insurance Contracts. Assignability of Cash Surrender Value

Insurance. Nature and Incidents of Insurance Contracts. Assignability of Cash Surrender Value

Bankruptcy. Insurance. Policy Had No Technical Cash Surrender Value. Assignable Interest Passes to Trustee

Bankruptcy. Insurance. Policy Had No Technical Cash Surrender Value. Assignable Interest Passes to Trustee