When To Surrender A Life Insurance Policy? 
Surrendering a life insurance policy requires careful consideration . The termination of coverage should never occur when you have family members , business partners dependent on your economic value and charities who depend on your contributions . Always have continuing coverage . Keep in mind that surrendering cash value life insurance with gain in the contract will trigger an ordinary income tax event and if you 're receiving Social Security benefits , they may be be taxed as well . 