Life Insurance - What is Surrender Value?

When a policyholder wishes to encash his policy due to urgent need of cash he returns back the policy to the insurer for which he is entitled to an amount. This is called surrender of policy or termination of the policy before the stipulated period. Policies can be surrendered provided it is kept in force for atleast 3 years. If it has been in force for five years the bonus is also added to the surrender value.