What Is A Surrender Charge On A Life Insurance Policy? 
The surrender charge is an amortized -LRB- i.e. spread out over time -RRB- accounting of the costs incurred by the insurer to place the policy in force . They can be thought of similarly to contingency deferred sales charges . The surrender charge is deducted from your cash value if you surrender the policy during the surrender period -LRB- generally the first 10-20 years of the life insurance policy -RRB- . Most life insurance contracts will explicitly tell you the policy value and the surrender value . The surrender value is the contract value net of the surrender charge . 