Surrender charges depend upon the individual company handling your policy and the number of years you have held said policy. Every company is different so surrender charges are something to look for before purchasing your policy. A company will have such fees clearly outlined in their contract.
Variable universal and universal life insurance policies boast surrender charges for the first 10 to 15 years of the policy's life. Essentially, it is an early termination fee. It is charged for early cancellation or withdrawal of money. The fee is taken from the cash value attributed to your policy by the company. Surrender charges can be hefty.
All you need to do is take a look at your policy and see if there are surrender charges. Your specific company may not charge them at all. Also, depending on how long you have had the policy you may have exceeded the early termination requirement. As with the aforementioned policies the cut off date is anywhere between 10 to 15 years.
Despite the probability of a charge, however, canceling your policy may still be the right thing to do. Depending on your situation the cost of the better policy or a reduction in financial responsibilities may save you more money in the long run. Additionally, fully surrendering your policy may make you eligible for the cash value assigned to the policy.
In many cases, any saved value attributed to policy is given to the client. This is also affected by the life of the policy. A policy that has been active for more than ten years will have a sizable amount of value attached to it. So do some research and see what the parameters of your specific policy are. Depending on the attached factors there may be no charge at all. In fact, you may see a return instead of a cost.