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Does cash surrender value make sense for your life insurance policy? Find out what it means and how it affects a cancelled policy.
Cash surrender value is a feature of certain types of life insurance policies in Canada, such as whole life, variable life and universal life. If you cancel a policy with cash surrender value, the insurance company will pay you a specific amount based on the cash value of the policy, less any policy loans, overdue premiums and fees.
Example: “Now that her children were financially independent, Kavita felt she no longer needed life insurance coverage, so she cancelled her policy and treated herself to a Mediterranean cruise paid for in part with the policy’s cash surrender value.”
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