I am often asked whether or not to surrender an insurance policy. Surrendering means to stop an insurance mid-term. The question is most difficult to answer in traditional life insurance because the analysis must factor in the downside of a surrender penalty, taxes not being returned and loss of death benefit against the possible benefit of better investment returns.
All insurances—life, general and health—have a provision for surrender if you have not made a claim. This provision is poorly understood because when you buy insurance the focus is on benefits and claim settlement.
