GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Surrender Charge


Synonyms:cash surrender value, cash value, policy surrender value, surrender fee, surrender value
Filed Under: annuities, estate-management, insurance, legal-contracts
Tags: annuity, contract, insurance, legal, life insurance
 

Definition of surrender charge

surrender charge
1. A fee charged to a life insurance policyholder if they cancel the policy. The insurer levies a surrender charge, also known as a "surrender fee", in order to cover the costs of keeping the policy on the books.

Related Terms and Acronyms:

  • accelerated benefit option   An option that allows the insured to receive insurance benefits before they would ordinarily be available.
  • annuity   A financial instrument that disperses a number of payments over a set period of time.
  • cash surrender value (CSV)   The liquid value of an insurance policy if the policyholder voluntarily cancels the policy before maturity or an insured event.
  • life insurance   An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
      ➥  CanEquity offers life insurance.
  • living benefits   The option for a life insurance policyholder to receive a portion of their death benefit in advance of their death.
  • permanent life insurance   A class of life insurance policies, which include both universal and whole life insurance, with guaranteed death benefits at the end of their terms.
  • policy loan   A loan where a life insurance policyholder's death benefit is used as collateral.
  • surrender rights   The contractual right for a life insurance or annuity policyholder to cancel his or her policy.
  • valuation clause   A clause in an insurance contract that states how much an insurer is willing to pay for an asset after an insured event.
  • viatical settlement   A contract where an individual agrees to sell his or her life insurance policy to a third party before their death.

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