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Cash value is the amount of money you can build up while you pay for types of permanent life insurance. When you want to access these funds, you may withdraw from the policy, borrow against it through a policy loan, or accept the cash surrender value by giving up the policy. Aflac offers whole life insurance with cash value that can give you lifelong coverage. Let’s take a closer look at the surrender value of life insurance and how it works.
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Permanent life insurance policies, like whole life or universal life insurance, accumulate cash value that adds to the death benefit as you pay your premiums over time. This increases the overall value of the policy, which you may access in the form of living benefits, borrowing against the value, or getting the cash surrender value if you surrender your policy.
The cash surrender value is what you receive if you choose to cancel or surrender your life insurance policy. It deducts surrender fees or any funds required to repay loans or premiums that haven’t been paid. Typically, surrender fees range between 0% and 10% of the policy’s cash value and decrease each year.1
Not all types of life insurance come with a cash surrender value. Here are a few types that do:
Whole life insurance is a permanent life policy that offers coverage for your entire life. It has a guaranteed death benefit and cash value component that accumulates interest over time.2 Whole life insurance might make sense if you’re a high earner or have long-term financial obligations.
Universal life insurance is a type of flexible permanent life policy. It can allow you to increase or decrease your premium payments.3 If you decide to decrease the amount you spend on premiums, you can expect the difference to be withdrawn from your cash value.
Don’t wait until it’s too late. Help cover yourself and your family with coverage from Aflac.
Get StartedFortunately, it’s easy to calculate your cash surrender value. First, add up the total payments you’ve made toward your life insurance policy. Then, subtract the surrender fees your insurance company will charge. You’ll be left with the actual payout you may receive if you terminate or surrender your life insurance.
If you don’t want to cancel your life insurance policy, here are some alternative ways to use its cash value:
You can typically withdrawal from the cash value in your account. However, the money you withdraw will be subtracted from the overall death benefit that your beneficiaries stand to receive after your death.
You may take out a life insurance loan that uses your policy as collateral. In the event you still owe money when you pass away, that amount will be deducted from your death benefit. The more cash value you accumulate, the more you can borrow.
If you’re struggling to make premium payments, you may be able to use funds from your cash value to cover them. That way, you can avoid surrendering the policy entirely. Just keep in mind that this will also reduce your death benefit.
There are several instances where you might consider surrendering a life insurance policy and receiving the cash surrender value:
Whether or not surrendering your policy for the cash surrender value makes sense depends on your unique financial situation and goals.
Surrendering your life insurance policy is not always advisable, but it can be a way to get access to the cash value the policy has accumulated during your life. Aflac offers whole life insurance plans with cash value that can help you and your family meet your financial goals. Chat with an agent today to explore your life insurance options and get a quote.
Get Started
Wondering what life insurance policy is best for you? Find out which type of life insurance can offer you the best coverage.
Life insurance with cash value lets you withdraw money to cover necessary expenses. Find out how cash value savings work and the types of insurance policies offered, including whole life insurance.
Wondering what life insurance policy is best for you? Find out which type of life insurance can offer you the best coverage.
Life insurance with cash value lets you withdraw money to cover necessary expenses. Find out how cash value savings work and the types of insurance policies offered, including whole life insurance.
1 Bankrate - How much does an annuity cost? A guide to annuity fees and commissions. Updated July 18, 2025. https://www.bankrate.com/retirement/how-much-does-an-annuity-cost/. Accessed July 21, 2025.
2 Investopedia - How Whole Life Insurance Works. Updated May 7, 2025. https://www.investopedia.com/terms/w/wholelife.asp. Accessed July 21, 2025.
3 Nerdwallet - What is Universal Life Insurance? Pros, Cons, and Cost. Updated February 27, 2025. https://www.nerdwallet.com/article/insurance/universal-life-insurance. Accessed July 21, 2025.
Coverage underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans – A68000 series: Whole Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368100. In Delaware, Policy A68100. In New York, Policy NYR68100. In Arkansas, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100. Not available in Delaware. Q60000 series/Whole Life Policies: In Arkansas, Delaware, & Oregon Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. In Pennsylvania Policy Q60100MPA, In Texas, Q60100MTX, Not available in Virginia.
Aflac does not offer universal life insurance, but we can point you toward our whole life insurance policy if you have different coverage goals in mind. Chatting with an agent about your options may make this decision easier.
Coverage is underwritten by Tier One Insurance Company.
Final Expense: Arkansas, Delaware, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Aflac Final Expense policies are not available in New York.
Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).
This is a brief product overview only. Coverage may not be available in all states including but not limited to DE, ID, NJ, NH, NM, NY, or VA. Benefits/premium rates may vary based on plan selected. Optional riders are available at an additional cost. The policy has limitations and exclusions that may affect benefits payable. Refer to the policy for complete details, limitations, and exclusions. For costs and complete details of the coverage, please contact your local Aflac agent.
The content herein is provided for general informational purposes and is not provided as tax, legal, health or financial advice for any person or for any specific situation. Employers, employees and other individuals should contact their own advisers about their situations. Receipt of accelerated death benefits may affect eligibility for public assistance programs. Benefits may also be taxable, and are not expected to receive the same favorable tax treatment as other types of accelerated death benefits that may be available.
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