What does 'surrender' refer to in terms of insurance policy?

In the context of insurance policies, 'surrender' primarily refers to the voluntary cancellation of a policy by the policyholder, usually before its maturity date. When a policyholder surrenders a policy, they typically receive any cash value accumulated in the policy, though there may be fees or penalties involved, depending on the specific terms and conditions of the policy. This action means that the policyholder is choosing to end their coverage and forfeit any further benefits associated with the insurance policy.

The other options do not accurately reflect the concept of 'surrender.' Policy renewal refers to the process of extending the coverage of an existing policy, which is distinct from surrendering it. Transferring a policy to another individual does not capture the essence of surrendering, as it implies a change in ownership rather than cancellation. A policy's maturity date refers to the point at which the policy is set to expire or pay out benefits, which is unrelated to the act of surrendering the policy.