What kind of value is payable to the policyowner if a whole life policy is surrendered before its maturity date?

When a whole life insurance policy is surrendered before its maturity date, the policyowner is entitled to receive the cash value of the policy. This cash value is the savings component of the policy that accumulates over time, reflecting the amount of money that the insurance company has set aside from the premiums paid. Whole life policies are designed to provide both a death benefit to beneficiaries and a cash accumulation that grows at a guaranteed rate.

The cash value can be accessed by the policyowner through various means, such as surrendering the policy or taking a loan against the cash value. If the policy is surrendered, the policyowner no longer has coverage under that policy but receives the accumulated cash value, which can be used for other financial needs.

Other options do not accurately represent what is returned to the policyowner upon surrender. The face value refers to the death benefit payable upon the insured's death, and the loan value pertains to the amount available for borrowing against the cash value while still maintaining the policy. Reserves generally refer to the funds set aside by the insurance company to ensure it can fulfill its future payment obligations and are not something that is paid out to policyowners in the event of surrender.