The surrender value of life insurance refers to the legal claims of the policyholder to a residual payout on termination of insurance. The life insurance surrender must be carefully considered. The surrender value of life insurance is always by the insurer and the payment amount from the policyholder.
Colloquially, it means that the policyholder buys back the contract, but one who is, at the end which receives the payment. Prior to the issuing life insurance you should compare all the offers of different suppliers, because only then can an optimal basis between the policyholder and the insurance company to be created.
The main reason for the surrender value on the one hand, the payments already made, that is, the contributions and the guaranteed return on assets. On the other hand, costs are for the pure risk protection and the fees provided for the completion of the placement and management of the contract into account. These fees must now be spread over the first five years. Partial deduction still came to a cancellation.
To prevent that policyholders receive back a termination no money or only a very small amount, and to provide more transparency, since there are some rules, the companies are obliged to provide their customers before finalizing the contract with an overview of the surrender values are available. Based on these data might give you an idea of what the financial implications has a termination.
In addition, the companies were obliged to pay a minimum cash surrender value although it is still the simple formula contributions plus interest, minus fees. But the bottom line for the customer must now be about 50 percent of the paid amounts. The past practice to pay for a few years only a minimum redemption value deferred, the judge with regard to the violation of the protection of property against a stop.