Five years ago, I opened a 20-year term life insurance policy with Protective Insurance. In my recent annual statement for the policy, I was surprised to see a non-zero value listed next to "surrender value." The value listed here is about 75% of my annual premium. I don't remember if previous statements had a non-zero surrender value listed.

I didn't think term policies would have a surrender value, and everything I could find via a quick internet search also indicated as much.

Is it possible for a term policy to have a surrender value, or is the term being used in a different way here than it is for a whole life policy?


1 Answer 1


I think it's reasonable that term policies could build some surrender value based on your likehood of dying during the remainder of the term. You'll get older, which increases your likelihood of death naturally, offset by the shorter remaining term. On balance, maybe this does create some value. Also, you could have a major illness which greatly increases your chance of dying during the remaining term, in which case maybe you could end up with a huge surrender value.


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