Cash surrender value is the amount of money your life insurance provider pays to you if you choose to cancel your life insurance policy before the time agreed on. If you want to cancel your current life insurance policy, here is a list of five things you should know about cash surrender value.
- Once you collect cash surrender value, you no longer have life insurance.
- The rule for receiving a cash surrender value is different with each life insurance policy. Some life insurance policies do not give you money if you cancel your life insurance policy before it matures. Other life insurance providers may charge you an extra fee if you surrender your policy before the agreed period.
- Term life insurance does not have a cash surrender value. That is, if you cancel your term life insurance policy, you will not receive a portion of your previously paid premiums.
- The amount of money you receive when you cancel your life insurance policy varies. If you have had your policy for a short period, the cash surrender value is small. However, if your policy is old, the money you will receive for your policy will be higher.
- The worth of your cash surrender value can change. If the portion of your premiums put into investments does well, you receive more money when you cancel your policy. If the investment was not a good one, you will receive less money after cancelling your policy.