Insurance
Life Policy Surrender Value Paid
Paying a policyholder who surrenders their whole life or endowment policy before maturity.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Policy Liability / Actuarial Reserve | Liability (-) | 8,500.00 | - |
| Cash / Bank (Surrender Payment) | Asset (-) | - | 7,500.00 |
| Surrender Gain (Penalty Retained) | Revenue (+) | - | 1,000.00 |
💡 Accountant's Note
Surrender values are less than the accumulated policy reserve — the difference (surrender penalty) is the insurer's gain for early termination. Surrenders are a major source of profitability or loss in life insurance.
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