mr. Thomas assured his life for the sum of N300,000.00 for a period of 20 years. The premium payable being N2,200.00 monthly.due to loss of employment, thom...

mr. Thomas assured his life for the sum of N300,000.00 for a period of 20 years. The premium payable being N2,200.00 monthly.due to loss of employment, thomas was not able to pay the premium in the last 3 months .

what is the term used for the amount payable to mr. Thomas if he chooses to discontinue with the contract

Answer Details

The term used for the amount payable to Mr. Thomas if he chooses to discontinue with the contract is called the surrender value. Surrender value is the amount that an insurance company will pay to the policyholder if they choose to terminate or surrender their insurance policy before the end of the policy term. It is the amount of money that the policyholder is entitled to receive after deductions for any outstanding premiums, fees, or charges. In this scenario, if Mr. Thomas chooses to discontinue with his life insurance policy, the insurance company will calculate the surrender value based on a number of factors such as the length of time the policy has been in force, the amount of premiums paid, and the policy's current cash value. The surrender value may not be the full sum assured of N300,000, but it will be a certain amount based on the policy's terms and conditions.