Some policies have surrender values, others have none. This depends on the kind of policy you have taken out.
Some of the available options are:
a. Pure life cover: Here you pay only a risk premium. The whole premium goes towards life cover. This is the most economical option if you need life insurance.
b. Life cover with cash values: The premium is split between risk cover and an investment portion. The cash values usually remain low for a considerable period, before starting to build up.
c. Endowment policies: These are investments. The whole or a large portion of the contribution goes to the investment account. These can have risk covers as ancillary benefits.
Usually it is considered the better option to have separate policies for life and investment options. This is because a separate premium is paid for each, and if there is a claim or maturity on one, the other can continue. If you have a limited budget, you may have to combine the two.
When you take out a policy the insurer should clearly indicate the premium, as well as illustrative cash values of the product over set periods. If you do not have access to these records you can request a policy printout from your advisor. This would then convey this information to you.
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