The sum of money given by an insurance company to the insured on a life policy that is cancelled before it has run its full term. The amount is calculated approximately by deducting from the total value of the premiums paid any costs, administration expenses, and a charge for the life-assurance cover up to the cancellation date. There is little or no surrender value to a life policy in its early years. Not all life policies acquire a surrender value; for example, term assurance policies have no surrender value.
Subjects: Financial Institutions and Services — Accounting.