How to Surrender Insurance Policies

Every whole life insurance policy has a cash value, a face value and a surrender value. The face value is the amount that will be paid when you die. The cash value is like equity in your home: A portion of each premium payment is your money, which you can borrow from or cash out at any time. The surrender value is something in between. At any time, you can choose to stop paying on your whole life policy but leave it in place. The face value of the policy will be lower than the original amount, but you never need make another payment.

Check your policy paperwork. Most policies include a schedule that lists the cash and surrender values of the policy year by year.

Subtract any policy loans you've taken out from that surrender value to determine the approximate real value of the policy.

Decide if the surrender value is enough to justify stopping further payment. If not, consider keeping the policy until it is high enough. (Use the schedule of values to set a date.) If you need to stop paying for financial reasons, it might be best to take the cash value and cancel the policy altogether.

Call your insurance company or personal agent. Your policy paperwork should include the phone number and your policy number. You will need both.

Ask for the exact surrender value of your policy for that date. Though the schedule in your paperwork gives you an accurate general idea, the customer service rep will have up-to-date details. If the number is very different from your original estimate, reassess whether this is the right course of action.

Ask the customer service representative how to take the surrender value of your policy. Depending on the company, you might need to fill out a request form or follow other specific company directives.

Double-check a month later to make sure your orders went through.


  • Life insurance can be a complex topic. Be sure to ask your customer service rep or insurance agent any questions you have. Keep asking until you're certain you understand.