Cash Surrender Value Life Insurance Chicago Illinois IL

Reader’s Question:

What is a “Cash Surrender Value” and why is it under my policy here in Chicago, Illinois?

Leigh Allen

Chicago, IL

“Cash Surrender Value” is basically a clause or stipulation within your life insurance policy that would probably state the amount of money you will be receiving, should you decide to cash-in or discontinue your existing life insurance coverage there in Chicago, Illinois. This kind of feature is mostly found only in whole life insurance, permanent life insurance, universal and variable life insurance or any form of life insurance that covers the entire lifespan of the insured individual.

The actual amount of money that would be returned to the individual who decided to terminate the policy would vary between companies and state regulatory laws. There will be some life insurance provider that would have specific conditions whereby your policy would not actually have any cash surrender value if you cancel within a year or two into your coverage period. Some might also not return the full amount of life insurance premiums you paid to recover the expenses they have incurred when setting up your policy.

Also, state or government regulation may impose a certain amount of standard policy reserve for every life insurance policy, and it is possible that the said company would need to keep your policy for a set period of years (usually two years) to hit this standard so by pulling out soon they may opt to put a charge to you. It would be best to get in touch with your life insurance provider and ask what to expect in the even that you do decide to surrender your policy.

Tags: whole life insurance, life insurance questions, life insurance information, advise