CFA institute portfolio management question

Hi all

Perrin’s Life Insurance Policy

Face value $500,000
Annual premium (paid at beginning of the year) $12,000
Policy dividends anticipated per year (paid at end of the year) $2,000
Cash value projected at the end of 20 years $47,000

In the calculations provided in the answer the cash value was not taken into account to give the cost per year that needed to be paid. Why is this?

The cash value (less any surrender charges, market value adjustment, etc) is paid to the policyholder on surrender. Once surrendered, there is no more insurance contract.