Function

• As you pay life insurance premiums, a certain amount is diverted to savings. This amount grows slowly at first and more rapidly the longer you hold the policy.
  
  

Misconceptions

• The face value of your policy is not the amount you would receive when you surrender the policy. Instead, it is the amount your beneficiaries would receive upon your death. The surrender value might be much less.
  
  

Benefits

• If you no longer have a need for life insurance but need immediate cash, you might wish to surrender the policy instead of continuing paying premiums.
  
  

Considerations

• Your insurance policy might allow you to take loans against the cash value. This allows you to remain insured while still having ready access to cash without borrowing from banks.
  
  

Warning

• If you surrender a policy, then decide you still need insurance, you can pay much higher premiums because of advanced age or declined health for a new policy.