Definition of Surrender Charge

Surrender Charge

Expense charges applied when the owner of a policy surrenders a policy for its cash value.

Back Charge

Billings for work performed or costs incurred by one party that, in accordance with the agreement, should have been performed or incurred by the party to whom billed. Owners bill back charges to general contractors, and general contractors bill back charges to subcontractors. Examples of back charges include charges for cleanup work or to repair something damaged by another subcontractor, such as a tub chip or broken window.

Cash Surrender Value

This is the amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured. This does not apply to term insurance but only to those policies which have reduced paid up values and cash surrender values. A cash surrender in lieu of death benefit usually has tax implications.

Cash Surrender Value

Benefit that entitles a policy owner to an amount of money upon cancellation of a policy.

Prepayment Charge

A fee charged by the lender when the borrower prepays all or part of a closed mortgage more quickly than is set out in the mortgage agreement.

Surrender

Give up certain rights under a policy, or give up the policy itself.

Account Value

The sum of all the interest options in your policy, including interest.

Accumulated Value

An amount of money invested plus the interest earned on that money.

Appraisal Value

An estimate of the market value of the property.

Assessed value

The dollar value of an asset assigned by a public tax assessor for the purposes of taxation.

Back To Back Annuity

This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.

Backdating

A procedure for making the effective date of a policy earlier than the application date. backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium.

Backfill

The replacement of excavated earth into a trench around or against a basement or crawlspace foundation wall.

Backing

Frame lumber installed between the wall studs to give additional support for drywall or an interior trim related item, such as handrail brackets, cabinets, and towel bars. In this way, items are screwed and mounted into solid wood rather than weak drywall that may allow the item to break loose from the wall. Carpet backing holds the pile fabric in place.

Backout

Work the framing contractor does after the mechanical (heating, plumbing & electrical) subcontractors finish their phase of work at the rough stage prior to insulating to get the home ready for a municipal frame inspection. Generally, the framing contractor repairs anything disturbed by others and completes all framing necessary to pass a Rough Frame Inspection.

Benefit Value

The amount of cash payable on a benefit.

Cash reserves

The money the buyer has left over after the down payment and all those closing costs.

Holdback

An amount of money required to be withheld by the lender during the construction or renovation of a house to ensure that construction is satisfactorily completed at every stage.

R Value

A measure of insulation. A measure of a material's resistance to the passage of heat. The higher the R value, the more insulating "power" it has. For example, typical new home's walls are usually insulated with 4" of batt insulation with an R value of R-13, and a ceiling insulation of R-30.

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