Life Assurance: Protecting the Family - Surrender value

If you cannot continue your premiums and need money particularly badly, you may elect to surrender your policy, provided your policy has been in force for a certain period (often two or three years). The amount of money to which you are entitled is called the surrender value of the policy, and this depends on the type of policy you own, your age, and the number of years' premiums you have paid when you ask for the surrender to take effect.

Since insurance companies take the view that they are here to provide you with insurance or long-term savings in accordance with the original policy contract, they pay very poor surrender values. A surrender value is usually calculated by taking off from the premiums you have paid the full cost of the insurance protection while the policy was in force, expenses, commission, and part of the cost of providing the insurance security and bonuses to other policyholders. This formula gives an especially poor surrender value during the early years of your policy, so you should only surrender your policy as a last resort if you are really desperate for cash.

Term-type policies do not normally have surrender values, which apply only to whole-life or endowment-type contracts.

Loans: Nearly all insurance companies lend money against the security of a policy, provided it has a surrender value. Some insurers lend up to 90 % of the surrender value, others lend up to 200 %.You must, of course, pay interest to your insurers - sometimes this is fixed, but usually it fluctuates in line with general market interest rates. In practice, you need never repay the loan, as your total debt can usually be deducted from the sum assured when you die or when your policy matures.


Surrender value

Payroll Giving
It’s all very easy to organise.
Just ask the Personnel or the Payroll Department at your company and, if they already have a scheme, they will give you the relevant forms.  HM Revenue & Customs’ website has a list of Payroll Giving agencies and explains payroll giving in more detail.

Salon Gold Insurance

Cheaper Insurance for Salons, Freelance Hair and Beauty, and Mobile Businesses - click here

read on: Life Assurance: Protecting the Family - Canadian companies

If you cannot continue your premiums and need money particularly badly, you may elect to surrender your policy, provided your policy has been in force for a certain period (often two or three years). The amount of money to which you are entitled is called the surrender value of the policy, and this depends on the type of policy you own, your age, and the number of years' premiums you have paid when you ask for the surrender to take effect.

Since insurance companies take the view that they are here to provide you with insurance or long-term savings in accordance with the original policy... see: Life Assurance: Protecting the Family - Canadian companies