What happens when the owner of a cash value policy decides to surrender the policy?

When the owner of a cash value policy decides to surrender the policy, they receive the cash surrender value, which is the amount of money available to them upon cancellation of the policy. This value represents the accumulated savings within the policy, minus any surrender charges, loans, or other fees that may apply. When the policy is surrendered, the coverage ceases, meaning that the policyholder will no longer have life insurance protection after the surrender is completed.

The decision to surrender effectively ends the insurance contract, and the owner forfeits their right to any future benefits under the policy. This is why it's crucial for policyholders to carefully consider their options and understand the implications of surrendering their policy, including the potential loss of valuable insurance coverage.