what is surrender value

Surrender value refers to the amount of money a policyholder will receive if they try to access the cash value of their life insurance policy. It is the actual sum of money that a policyholder will receive if they choose to terminate a permanent life insurance policy before its maturity date or if they withdraw money from their own life insurance policys cash value. Surrender value is not to be confused with cash value, which is the amount the policy is worth as it builds over time. The cash value is equal to the sum of money that a policyholder has inside that cash-value-generating annuity or permanent life insurance policy. The surrender fees will reduce the surrender value, and these costs and the policys surrender value can fluctuate over the life of a policy. After a certain period, the surrender costs will no longer be in effect, and the cash value and surrender value will be the same.