Surrendering policy VS Reduced paid up option which is better?

The decision between a surrendering policy and a reduced paid-up option depends on your specific financial situation, insurance needs, and long-term goals. Let's understand the two options in more detail:

Surrendering Policy: 

Surrendering a policy means terminating it before its maturity date. By doing so, you essentially cancel the insurance coverage and receive the surrender value, which is the cash value accumulated in the policy minus any applicable charges or penalties. Surrendering can provide you with immediate  cash value of the policy, which can be useful for financial emergencies or when you no longer need the coverage.

Reduced Paid-Up Option: 

With a reduced paid-up option, you can stop paying future premiums on your policy while keeping it in force, but with a reduced death benefit and no additional cash value growth. Essentially, the policy becomes a smaller paid-up policy with no further premium obligations. This can be beneficial if you want to maintain some level of coverage while reducing your ongoing premium payments.

The better option for you depends on your specific circumstances:

If you no longer need the coverage provided by the policy or have found a better alternative, surrendering the policy might be a suitable choice. However, you should carefully consider any surrender charges, potential tax implications, and the impact of losing the death benefit protection.

If you still need the coverage but are looking to reduce your premium payments, the reduced paid-up option may be more appropriate. It allows you to maintain some level of insurance protection without additional premium obligations, although the death benefit will be reduced.