What is a common reason for a policyholder to surrender a life insurance policy?

A common reason for a policyholder to surrender a life insurance policy is that they may need access to the cash value of the policy. Many permanent life insurance policies accumulate cash value over time, which can be borrowed against or withdrawn. When a policyholder finds themselves in need of immediate funds—perhaps to cover urgent expenses, invest in other opportunities, or manage financial difficulties—they might choose to surrender the policy to access this cash value.

Another reason for surrendering a life insurance policy is if the policyholder no longer feels the need for the coverage. This could arise from various life changes, such as retirement, children becoming financially independent, or changes in financial priorities. If a policyholder determines that the insurance is no longer necessary for their financial planning, surrendering the policy might be a sensible choice.

Both needing the cash value and no longer requiring the policy represent significant motivations for initiating a surrender, making the combination of these reasons a valid explanation for why a policy might be surrendered.