Cash values are usually associated with
whole life insurance or
endowment life insurance and other forms of
permanent life insurance. The contract determines for each possible cancellation date the related cash value. If the investment of premiums is contractually made in an individual account, the cash value is the value of the investments in that account at any particular time minus a
surrender charge. Such cash value credited to an individual account during the tenure of the policy keeps growing with every payment of premium. It also increments due to
interest credited. If a policyholder dies without using the cash value, the policyholder's
beneficiaries will only receive the death benefit and not the cash value. The policyholder may also be able to use the cash value as
collateral on a loan, make withdrawals or use it to pay
insurance premiums. The cash value will often be similar or even equal to the
reserve to be held by the insurance company for the net obligations from the contract. As such, the amount is usually invested and earns investment income for the insurance company which is to some extent forwarded to policyholders of
participating contracts. Since often initial premiums are not invested but covering initial costs associated with selling the contract (upfront or front-end fee), the amount available may be significantly lower than the sum of premiums paid for some time, initially even zero. Later, interest credited might compensate that initial loss. The value of the investment is often subject to a surrender charge in determining the cash value. A surrender charge offsets the costs associated with selling the contract and allows these contracts to be sold with little or no upfront fees. Surrender charges are imposed when a contract is cancelled within a set time frame. Any cancellations after that time frame is not subject to a surrender charge. Typically surrender charges decrease on an annual schedule until they disappear altogether. ==Guaranteed cash value==