What would the beneficiaries receive if a $100,000 whole life insurance policy has a $30,000 cash surrender value and a $10,000 policy loan is taken?

In the scenario provided, the total death benefit of the whole life insurance policy is $100,000. When a policyholder takes a loan against the policy, that loan amount is subtracted from the death benefit. Additionally, the cash surrender value of $30,000 represents the amount the policyholder could receive if they chose to cancel the policy rather than keep it in force.

In this case, because a loan of $10,000 has been taken against the policy, this amount reduces the death benefit available to the beneficiaries. Therefore, the calculation for the death benefit that beneficiaries would receive is as follows:

Total death benefit: $100,000

Minus policy loan amount: $10,000

Resulting death benefit: $90,000

The cash surrender value does not directly affect the immediate payout to beneficiaries in the event of death; it is more relevant in the context of the policyholder choosing to surrender the policy. Thus, the beneficiaries would receive a death benefit of $90,000 after accounting for the outstanding loan. This ensures the beneficiaries are compensated appropriately while also reflecting the financial activity (loan) performed on the policy.