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Why There's No Cash Surrender Value of Term Life Insurance

EverQuote staff

You may have heard the words "cash value" used to describe a feature of some life insurance policies. Cash value life insurance contains an account that builds up value over time. You can withdraw the cash or take loans against it. If you want to "surrender" or end the policy, you can take the cash value minus any surrender fees.

But you also generally pay more for policies that have cash value.

If you're looking for life insurance that has cash value, consider these options:

Term life insurance is usually the cheapest kind of life insurance to buy because it has no cash surrender value and it lasts for only a certain number of years (such as 10, 20 or 30). If you decide to end a term life insurance policy, you wouldn’t get any money back because there’s no cash value.

Despite the lack of cash value, term life insurance is a good choice for people who want life insurance to cover a specific debt or number of years. For example, people often buy term life insurance to cover the years until they retire, or the years of a mortgage.