EMERGENCY FUNDS
am a regular reader of DSIJ magazine and I find the articles very insightful.As I was going through the special report titled ‘A Guide to Claiming Life Insurance’, I came across the term ‘surrender value’ regarding which I need some clarification. Since I am in need of funds, would it be all right to surrender my life insurance policy?
—Shally Ahuja
Editor Responds : It’s wonderful to know that you go through all our articles. I believe surrendering your life insurance policy to meet immediate cash needs is not a good idea. Life insurance is a tool for risk management and protects you and your family from financial stress due to any unfortunate mishap. For cash requirements you need to create either an emergency fund or use some of your other investments. We don’t recommend surrendering your life insurance policy in any case, excluding some exception