What does "cash surrender value" mean in a whole life insurance policy?

In a whole life insurance policy, "cash surrender value" refers to the amount a policyholder would receive if they decide to cancel or "surrender" their policy before it matures or before their death. This value is essentially a savings component of the whole life insurance policy, as a portion of the premiums paid goes towards building up cash value over time.

When a policy is surrendered, the insurer pays the policyholder this accumulated cash value. It's important to note that if the policyholder has taken out loans against the policy, the cash surrender value would be reduced by the outstanding loan amount. This option is beneficial for policyholders who may need immediate funds or who decide they no longer want to maintain the life insurance coverage, providing a financial resource that can be accessed if necessary.