What Is Life Insurance Surrender Charge? 
In a whole life or Universal Life policy there are surrender charges . An insurance policy costs the insurance company a great deal of money to issue . Agent commissions , underwriting , and a host of other administrative charges . As a result the surrender charges are placed to help discourage a policy holder from cashing in a policy before those expenses can be recouped . This can be anywhere from three to 15 years depending on the company . They will usually reduce each year until they disappear . They are only taken out of the accumulated cash value if you surrender the policy , otherwise you really never see them . They are not charged if the company has to pay the death benefit . 