What does a Cash Surrender Value Rider create?

A Cash Surrender Value Rider is a feature commonly associated with permanent life insurance policies, which accumulates a cash value over time that can be accessed by the policyholder. The correct choice indicates that this rider creates a cash value amount based on a percentage of the premiums paid over claims. This percentage reflects the insurer's calculation, which typically considers factors such as premium payments, the policy's performance, and the insurer’s overall claims experience.

As the policyholder continues to pay premiums, the cash value grows, allowing for potential borrowing against this amount or surrendering the policy for its cash value if it is no longer needed. This aspect provides financial flexibility to the policyholder, making it easier to manage financial needs throughout the life of the policy.

The options regarding a cash value equal to premiums paid, disability claims, or payouts upon reaching retirement age do not accurately reflect the function of the Cash Surrender Value Rider. The cash value is not guaranteed to equal 100% of the premiums paid, it does not specifically provide benefits for partial disabilities, nor is it directly tied to reaching retirement age in terms of cash payout. Instead, the cash value is contingent on the premiums and the insurer's financial practices, hence the accurate characterization in the correct choice.