- The right for an individual to cancel a contract such as a life insurance policy or annuity and collect its cash value. In exercising their surrender rights, an individual may be forced to pay a surrender charge. In many cases, a viatical settlement will offer a life insurance policyholder a larger sum than a policy's cash value, but viatical settlements are not legal in all Canadian Provinces.
policy surrender rights, insurance surrender rights
Related Terms and Acronyms
- Accelerated Benefit Option — Definition,
- An option that allows the insured to receive insurance benefits before they would ordinarily be available.
- Annuity — Definition,
- A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
- A financial instrument that disperses a number of payments over a set period of time.
- Cash Surrender Value (CSV) — Acronym, Important,
- The liquid value of an insurance policy if the policyholder voluntarily cancels the policy before maturity or an insured event.
- Life Insurance — Definition, Very Important,
➥ CanEquity offers 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.
- Living Benefits — Definition,
- The option for a life insurance policyholder to receive a portion of their death benefit in advance of their death.
- Permanent Life Insurance — Definition,
- 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 — Definition,
- A loan where a life insurance policyholder's death benefit is used as collateral.
- Spin-Life — Definition,
- A financial industry that specializes in buying life insurance policies from individuals or convincing individuals to take out new life insurance policies with an investor as a beneficiary.
- Stranger Originated Life Insurance (STOLI) — Acronym,
➥ Illegal in many Canadian provinces.
- A life insurance policy purchased by someone without any insurable interests with the insured person.
- Surrender Charge — Definition,
- A charge levied when a life insurance policyholder cancels his or her policy.
- Valuation Clause — Definition,
- 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 — Definition,
- A contract where an individual agrees to sell his or her life insurance policy to a third party before their death.