Surrender charge difference is the difference between which values?

Surrender charge difference is the difference between which values?

• A. The difference between the cash value and the cash surrender value
• B. The difference between the policy face amount and cash value
• C. The difference between the cash value and death benefit
• D. The difference between the cash surrender value and death benefit

Answer: (A)

Surrender charges are the fees taken when you withdraw from a cash-value life policy early, so the amount you can receive is the cash value minus those charges. The surrender charge difference specifically equals the cash value minus the cash surrender value. In other words, it’s the amount deducted from the policy’s current value to arrive at what you’re actually paid if you surrender. This calculation focuses only on the cash value and what you receive on surrender; the policy’s face amount or the death benefit aren’t used to compute this difference. For example, if the cash value is $20,000 and the cash surrender value is $18,000, the surrender charge difference is $2,000.

Surrender charges are the fees taken when you withdraw from a cash-value life policy early, so the amount you can receive is the cash value minus those charges. The surrender charge difference specifically equals the cash value minus the cash surrender value. In other words, it’s the amount deducted from the policy’s current value to arrive at what you’re actually paid if you surrender.

This calculation focuses only on the cash value and what you receive on surrender; the policy’s face amount or the death benefit aren’t used to compute this difference. For example, if the cash value is $20,000 and the cash surrender value is $18,000, the surrender charge difference is $2,000.