In which situation would a cash refund typically apply?

A cash refund typically applies in the event of policy termination with excess payments. When a policyholder pays more in premiums than is necessary for the coverage they have received, any excess amount collected by the insurer may be refunded upon termination of the policy. This situation often arises in premium-based policies where the total payments made exceed the actual costs for the coverage provided.

While surrendering a policy with a cash value does involve receiving a payment, it specifically pertains to a cash value component, which usually relates to permanent insurance policies. A life insurance benefit payout occurs upon the death of the insured, not a refund situation. Finally, the expiration of the policy term generally means that the coverage ends, and while some policies may provide a return of premiums under specific circumstances, it is not a standard cash refund situation like the excess payments case. Therefore, choosing the situation where excess payments lead to a cash refund aligns most accurately with the concept of a cash refund in insurance practice.