What will a person receive if they surrender a $20,000 whole life insurance policy with a cash value clause?

When a person surrenders a whole life insurance policy that includes a cash value clause, they are entitled to receive a calculated amount that reflects the policy's cash value. This amount typically includes the premiums that have been paid over the life of the policy, adjusted for any loans taken against the policy and accumulated interest.

Whole life insurance is designed to build cash value over time, which allows policyholders to access funds through surrendering the policy or borrowing against it. The cash value is determined by the insurer's calculations, which take into account the length of time the policy has been held, the amount of premiums paid, and the policy's growth rate.

In contrast to other options: surrendering does not lead to receiving nothing, as whole life policies are generally redeemable for their cash value. A refund of nominal installments does not accurately represent the accumulated value because policy value calculations are not based merely on installment amounts. Similarly, only receiving the face value of the policy overlooks the cash value that can be accessed upon surrender. Thus, the correct answer reflects the nature of whole life policies, acknowledging both the investment the policyholder has made and the financial growth over time.