Utah Life Producer Practice Exam

The term "surrender value" specifically refers to the amount available to a policyholder if they choose to terminate their permanent life insurance policy before its maturity. This value is especially relevant in types of permanent life insurance, such as whole life or universal life policies, where the policy builds cash value over time.

When a policyholder decides to surrender the policy, they receive the surrender value, which often includes any accumulated cash value minus any applicable surrender charges. This is different from the total corpus of invested premiums, which simply reflects what the policyholder has paid into the policy, and does not account for the growth of cash value or any deductions.

Additionally, while the cash value accumulated in a whole life policy may contribute to the surrender value, the two are not synonymous. The cash value reflects what has built up over the life of the policy, while the surrender value is the amount the policyholder can receive upon surrendering the policy, which might be less than the full cash value due to fees or charges.

Finally, the sum assured payable upon death represents the policy's face value and is not related to surrendering the policy. The key distinction is the timing and conditions of access to these amounts; the surrender value is concerned with early termination, while