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What is the Cash Value Accumulation Test (CVAT)?

April 26, 2017Accumulation cash cvat Test value

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What is the Cash Value Accumulation Test (CVAT)?

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A. Under CVAT, the policy value of a policy must not at any time exceed the Net Single Premium (NSP) necessary to fund future benefits under the policy. To satisfy the CVAT, the death benefit will increase to keep the NSP greater than or equal to the policy value of the policy. In addition, if benefits under the policy are reduced after issue, CVAT will generally allow much more flexibility in choosing premium amounts.