Surrender Charge

AAA

DEFINITION of 'Surrender Charge'

A fee levied on a life insurance policyholder upon cancellation of his or her life insurance policy. The fee is used to cover the costs of keeping the insurance policy on the insurance provider's books.

Also known as a "surrender fee".

INVESTOPEDIA EXPLAINS 'Surrender Charge'

If the insured party informs the insurer in advance of the cancellation of his or her policy, and then continues to pay for a period of time before the actual cancellation, the surrender charge is usually waived.

RELATED TERMS
  1. Surrender Period

    The amount of time an investor must wait until he or she can ...
  2. Floating Charge

    A security (i.e. mortgage, lien, etc.) that has an underlying ...
  3. Surrender Rights

    A right to cancel an annuity or life insurance contract in exchange ...
  4. Annuity

    A financial product sold by financial institutions that is designed ...
  5. Variable Life Insurance Policy

    A form of permanent life insurance, Variable life insurance provides ...
  6. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an ...
Related Articles
  1. Variable Vs. Variable Universal Life ...
    Retirement

    Variable Vs. Variable Universal Life ...

  2. Top 403(b) Questions Answered
    Retirement

    Top 403(b) Questions Answered

  3. Life Insurance: Putting A Price On Peace ...
    Insurance

    Life Insurance: Putting A Price On Peace ...

  4. Taking The Bite Out Of Annuity Losses
    Options & Futures

    Taking The Bite Out Of Annuity Losses

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center