What happens to the accumulated cash value of a whole life insurance policy if a policyholder chooses to receive a cash surrender?

When a policyholder chooses to receive a cash surrender from a whole life insurance policy, they effectively terminate the policy, which results in the loss of all insurance coverage. The cash surrender value is the amount that the policyholder receives after canceling the policy, which is the accumulated cash value minus any outstanding loans or fees. As a result of this action, the policyholder will no longer be insured under that policy.

The other options describe scenarios that do not occur with a cash surrender. For instance, coverage cannot continue after surrendering the policy, and the cash value is not reinvested into a new policy, nor does the policy remain in force at a reduced amount once it is surrendered. Thus, the decision to cash surrender the policy directly impacts the policyholder's insurance coverage, leading to a complete loss of that protection.