On this topic, can someone kindly explain to me the implication of the term : Critical Year in terms of payment of policy ?

It's something like when that year is reached, we do not need to pay the premium anymore, right ?

Am wondering here : if we feel that we have too many policies, and we terminate a policy, are there any problems or difficulties when we do this ?

I think any insurance company will not like us doing a surrender, right ?

Will they give us problems like not releasing the Cash back to us, or delaying the refund, etc ?

Normally how long will it be before they will refund us the Surrender Value ?

Thank you.

Coolpajames, thank you.

My friend bought a policy when he was young. It is not too much, it's only of a 40K coverage. He bought it when he was 20+, and he is, I think 41 today, not too sure about this.

He been paying his premium diligently for the last 17 years without a single miss. The Critical Year was 4 years ago, in 2006. and it was extended by the insurance company up to 2012.

Who knows if the insurance company will not extend it again come 2012 ? What else can he do, besides cancelling ?

I think the main reason he is contemplating to cancel the policy and take back the money is because he is pretty mad that his Critical Year has been extended without his knowledge. He has other policies too, and those were not extended.

Yes, there is a loss if he cancels, but it's better to lose now than to lose more later. He has been paying for 17 Years and his Surrender Value is still ONLY about 66% of the total amount paid in the last 17 Years. This is NOT worth it, right ?

Secondly, he feels having a coverage of 40K is not much today. With his current wealth level today, he always has 40K in his Emergency Funds, and he figures he can invest the Surrender Value himself better today rather than leave it with the insurance company.

Appreciate everybody's comments here.