Voluntarily terminating an insurance policy is also known as what?

Voluntarily terminating an insurance policy is referred to as surrender. This term specifically indicates that the policyholder has chosen to end the policy, which often involves returning the policy to the insurer, sometimes in exchange for a cash value if applicable. Surrendering a policy can be a strategic decision for individuals who may no longer need the coverage, want to stop paying premiums, or wish to access the policy's cash value.

While cancellation can refer to the termination of a policy, it typically suggests that the insurance company has canceled the policy for reasons such as non-payment of premiums or fraudulent behavior. Reinstatement involves returning a lapsed policy to its active status by meeting certain criteria, which is not akin to voluntarily terminating the policy. Abandonment is not a recognized term in the context of insurance policies and does not convey the voluntary aspect of ending a policy.

Thus, surrender is the most accurate choice reflecting the voluntary action taken by the insured to end their policy.