Surrender value

Surrender Value is the amount paid when an insurance policy is cancelled before it reaches the agreed maturity date.

The sum is calculated by taking into account the total premiums paid and the return on investment earned.

But because insurance companies tend to deduct their charges, including setting-up costs, during the early years of the policy, early surrender values are often low and may even be less than the amount actually paid in.

Last Updated: June 2007 © Moneyextra.com

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