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The Curious Bag
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The cash surrender value of a life insurance policy is the amount of money that an insurance company will pay to a policyholder who voluntarily terminates the policy before its maturity.
Types of Policies
Permanent insurance products such as whole life policies or annuities have a cash value.
Value
Cash surrender value refers to the savings element of a whole life policy. This can be paid out to the policyholder before death or maturity of the policy. However, in the early years of the policy, cash surrender amounts to very little compared to the premiums or payments made into the plan.
Feature
Whole life policies build cash value through excess premiums meant to be a reserve and in earnings that the excess premiums make through the insurance companies' investments of this excess.
Options
You may access a policy's cash value either through withdrawals, a cash value loan or by partial or full surrender of the policy.
Warning
Remember why you bought the whole life insurance. You may never get a better rate as life insurance rates are based on age, and this type insurance protects you for life. By keeping it you will never find yourself uninsured..
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