What is the policyholder entitled to if they surrender a whole life policy?

When a policyholder surrenders a whole life policy, they are entitled to the cash surrender value of the policy. Whole life insurance is designed to provide coverage for the entirety of the insured's life, accumulating cash value over time. This cash value is a manifestation of the premiums paid, which not only cover the insurance cost but also build savings over the life of the policy.

The cash surrender value represents the amount the policyholder can receive if they choose to terminate the policy before its maturity or before the insured event occurs. This amount is calculated based on the policy's accumulated value minus any outstanding loans or fees associated with the termination. Therefore, by surrendering the policy, the policyholder can access this cash value, giving them liquidity and flexibility in managing their financial needs.

The other options do not accurately represent the benefits one would receive from surrendering a whole life policy. Spousal coverage is typically related to life insurance provisions extending benefits to a spouse, which is separate from the cash value options. Decreased premiums would suggest a change in payment obligation rather than cash compensation, and extension of coverage does not apply since surrendering a policy ends the coverage entirely. Thus, the cash surrender value is the clear entitlement when surrendering a whole life policy.