Can anyone please explain what the "redemption value of a outstanding life insurance certificate" is.

Question

Not looking for specific #'s, just an explanation of how value is distinguished.

Answer 1

You probably have either a whole or universal life policy, which means that part of your premium is put aside to build value. Some policies are invested in the stock market, called variable policies, and the rate of return adjusts with the market. Most traditional products pay a fixed amount every year. Most policies also let you borrow against your cash value, or redemption value. This allows you to take out part of the money but still keep the insurance. The other way, a total surrender, is when you get all the money built up but you lose all the insurance. This can be bad because if you want insurance again, you have to go through the whole process again and your premium will likely be higher due to age or health. Hope this helps a little bit!

Answer 2

If you have a permanent life insurance policy or a cash value policy (many times the two are the same) then you will build cash value. Many times in the first 10 to 15 years there will be a surrender charge on your money in the policy. After the surrender period then the "redemption" or surrender amount is equal to the cash build up amount (or cash accumulation). If you wish to cash out the policy after the end of the surrender period you would be entitled to 100% of the cash accumulation, but be careful if you take all the money out your life insurance policy may be terminated.

Answer 3

Redemption value is distinguished by you when you sign up for the life insurance policy. If you sign up for a 50,000 life insurance poilcy that is what you get, minus the fees, application costs etc.. It also depends on what type of life insurance it is.

Answer 4

The amount of cash you will receive if you surrender the policy.