YOU ASK:
What is the definition of Cash Payment Option?
WE ANSWER:
The Cash Payment Option is an option which allows owners of life insurance policies and selected annuity contracts to surrender the policy or the contract in exchange of the cash surrender value. This amount is paid as a lump sum. This amount is usually more than the premiums you paid.
This is also called the cash surrender option.
What the policy owner should note, however, is that opting to surrender the policy in exchange for cash has additional costs. Since you are older than when you bought the original policy, buying a new policy to replace the old one will cost you more in premiums. There should also be tax penalties for surrendering the policy.
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More insurance terms around cash payment option:
- Cash Surrender Value
- Cash Value
- Catastrophe
- Catastrophe Bonds
- Catastrophe Deductible
- Catastrophe Factor
- Catastrophe Model
- Catastrophe Reinsurance
- Cell Phone Insurance
- Chartered Financial Consultant (ChFC)
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- Capital
- Capacity
- Businessowners Policy (BOP)
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