Keeping the Foreign Currency Insurance Recommended at the Bank: 12 Steps to Check Surrender Value and Exchange Rates on Your Policy｜税理士ロキ

The moment the phrase “rapid yen appreciation” flashes across the evening news, a slight unease stirs deep in my chest.

This is because I am reminded of the US dollar-denominated insurance I signed up for years ago, recommended at the counter when I went to the bank for a notice of maturity on a time deposit. It is a whole life insurance policy with a “single premium” payment, where a lump sum is paid at once, and coverage continues until death. The person in charge was pleasant, and the explanation was thorough.

“Instead of leaving it in a savings account, it will grow with dollar interest rates.”

Told this, I signed several times in the thick booklet I was handed. Since then, the policy has remained in an envelope somewhere in my document shelf. I open the “Notice of Contract Details” that arrives every year, but I just glance at the numbers and close it.

If I cancel it now, will the yen I paid back then return? If the yen strengthens, how much will it decrease? Above all, why did I sign up for that insurance in the first place?

Even if asked, I cannot answer. I wrote this article for you, a company employee in your 50s who is in exactly that state.

Nice to meet you, I am Tax Accountant Loki. I am an active tax accountant. I usually handle tax affairs for small and medium-sized enterprises and sole proprietors, but during the tax return season, I also take consultations from company employees. In those meetings, the topic of foreign currency-denominated insurance has come up almost every year for the past few years.

“The principal is protected in dollars.”

The trigger is usually a tax consultation.

“I am thinking of canceling my insurance, but will it be taxed?”

When asked this, I ask to see the documents at hand. Most common are single-premium foreign currency-denominated whole life insurance policies entered into at bank counters. I first ask this:

“When you signed up, how much did you pay in yen? Also, how much is the current surrender value in dollars?”

The most common answer I get back is this:

“I paid in yen, I believe it was a few million yen. The dollar amount… I haven’t looked at it. I was told the principal was protected in dollars, so I thought it would never decrease.”

Hidden here is a common misunderstanding.

The idea that it is “protected in dollars” only refers to the amount counted in dollars. You will ultimately use yen. Even if the dollar amount has increased, depending on the rate when you convert it back to yen, the yen you receive may be less than the yen you paid. Furthermore, upon cancellation, depending on the product, the money returned may be reduced or fluctuate due to mechanisms called “surrender charges” or “market value adjustments.”

When we open the policy and the “Notice of Contract Details” together on the spot and pick out the numbers one by one, the person consulting usually stops their hand midway.

“If I cancel this today, it’s less than I thought it would be in yen.”

Following that, I am almost always asked this:

“Then, when is the right time to cancel?”

My answer is always the same: “The correct answer cannot be determined until all your numbers are laid out. What you have laid out now is only half the picture.”

This is not about placing blame. There are many documents handed over at the counter, and no one remembers every explanation given on the day they signed. The problem is that you have never checked your own numbers even once since signing up.

This is not just about you.

According to complaint information published by The Life Insurance Association of Japan, complaints regarding new contracts for foreign currency-denominated insurance and annuities handled by bank agencies totaled 1,375 in fiscal year 2021 and 744 in fiscal year 2025. The number decreased from fiscal year 2021 to 2024 (742 cases) and has remained largely flat in fiscal year 2025. Even so, it continues to occur at a rate of several hundred cases every year.

The interim report on monitoring of companies selling risk-based financial products, published by the Financial Services Agency in April 2024, contains even more in-depth findings.

• Focusing on target-type insurance, about 60% of single-premium foreign currency-denominated insurance policies are surrendered within four years of purchase

• When breaking down eight representative single-premium foreign currency-denominated insurance products (investment type) in US dollars that finished their operation as of the end of August 2023 (average duration of 2.5 years) by factor, the effect of increased accumulated funds was thin, most of the profit was due to the weak yen, and surrender-related costs (market value adjustment and surrender charges) pushed down that profit margin

• Many priority monitoring targets (surveyed sales companies) are receiving complaints such as “I was not told that the principal could be lost”

Even within the scope of what I have seen in consultation sessions, both people who “just happen to hold it” and those who “just happened to surrender it” are often making decisions without checking the numbers.

To be clear, this article does not recommend surrendering your policy, nor does it recommend keeping it. I will not recommend any specific insurance company or product either. You are the one who decides. All this article does is extract the numbers you need to make a decision from your policy in an order that won’t confuse you.

By the time you finish reading, you will be able to use a calculator to estimate how much you would get in yen if you surrendered your foreign currency insurance today, and what exchange rate you would need to get back the yen you paid in. If you proceed to the paid section, you will be able to check the types of exchange rates, surrender charges, market value adjustments, and the basics of taxation, and when you finish reading, you will have a ‘one-page decision memo to determine whether to keep or surrender’.

What you will learn in this article

• The 4 places to open first in your policy and “Notice of Contract Details” (Free)

• Calculation formula for an estimate of how much you would get in yen if you surrendered today (Free)

• How to find the exchange rate to get back the yen you paid in (Free)

• [Paid] Types of exchange rates for converting to yen (TTM/TTB) and documents to check

• [Paid] How to check for the existence and duration of surrender charges

• [Paid] Existence of Market Value Adjustment (MVA) and the direction in which surrender value moves

• [Paid] Confirmation of target functions and how to receive funds in foreign currency

• [Paid] How to compare the three options: keep, surrender, or reduce the policy amount

• [Paid] The Basics of Taxation Upon Surrender (Formula for Temporary Income, as of 2026)

• [Paid] Contact Points for Complaints and Consultations

• [Paid] Fill-in-the-Blank Take-Home Sheet: ‘A Single Memo to Decide Whether to Keep It’

Demonstration: Opening 4 parts of the policy to calculate how much you would get in yen if you surrendered it today.

I will complete the process here that serves as the gateway to the 12 steps in the paid section. Please have these three things ready.

• Insurance Policy

• The most recent ‘Notice of Contract Details’ (the name varies by company; this is a document sent about once a year to inform you of the current status of your contract)

• A calculator or smartphone

If you cannot find the notice, you can often see the same figures on the insurance company’s My Page. If you cannot see them, it is sufficient to call the insurance company’s call center, provide your policy number, and ask, ‘Please tell me the current surrender value in both foreign currency and yen.’

Step 1: Write down the contract currency

Near the top of the policy, there are fields such as ‘Contract Currency’ or ‘Designated Currency.’ This indicates the currency in which the insurance is denominated, such as US dollars, Australian dollars, or euros.

In this article, I will proceed with the explanation using US dollars.

Step 2: Write down the paid insurance premiums in both ‘yen’ and ‘foreign currency’

For single-premium foreign currency insurance, even if you pay in yen, it is almost always converted into foreign currency by the insurance company upon receipt. The policy shows the insurance premium in foreign currency. The amount paid in yen may be listed on the policy, or it may only remain in the documents from the time of payment or the withdrawal record in your bankbook.

This is the key to the first line. The comparison is not against dollars, but against the yen you actually paid out after all.

Step 3: Write down the accumulation interest rate

There are fields on the policy or notice such as ‘Accumulation Interest Rate’ or ‘Planned Interest Rate.’ This is the figure that indicates the rate at which the accumulated funds, counted in dollars, are set to grow. How this is determined varies by product, such as types that are reviewed at fixed intervals or types that have a minimum guarantee.

A common misunderstanding I often hear during consultations is that “if the accumulation interest rate is 3%, it increases by 3% in yen every year.” The accumulation interest rate is strictly the rate at which the accumulated amount counted in foreign currency increases. How it grows when viewed in yen is determined by the combination of that rate and exchange rate fluctuations. If there are any fees deducted upon surrender, those will also have a separate impact.

For now, you can just copy these figures down. In the paid section of the steps, we will read how these numbers actually “take effect.”

Step 4: Write down the surrender value in foreign currency

Notices usually include a column for “surrender value” or “surrender benefit amount” in foreign currency. On the policy document itself, there may be a table showing examples of surrender values for each elapsed year. Use the figure with the most recent date. Also, write down the date that figure corresponds to.

Many people look at the table of surrender values by elapsed year on their policy and assume, “The surrender value in the Xth year is this amount.” That table is usually just an example based on the accumulation interest rate at the time of contract. You should check the current figure using the dated amount on your notice or personal web page. If there is a difference between the two, make a note of it. This will be a clue to help you decipher the reason for the difference in the paid section of the steps.

Step 5: Estimate how much you would get in yen if you surrendered today

Now it is time for the calculator. Let’s do one example with hypothetical numbers.

• Yen paid in: 7 million yen

• Insurance premium in foreign currency: 50,000 dollars (exchange rate at time of payment: 1 dollar = 140 yen)

• Accumulation interest rate: 3% range per year (just copy this down)

• Most recent surrender value: 53,000 dollars

You can check today’s exchange rate on a bank’s website or similar. Let’s assume the rate for converting foreign currency to yen is 1 dollar = 144 yen.

Estimate in yen = Surrender value (dollars) × Exchange rate to yen: 53,000 dollars × 144 yen = 7,632,000 yen

Compared to the 7 million yen paid in, this estimate shows a gain of 632,000 yen.

Now, let’s do one more calculation.

Rate to break even on yen paid in = Yen paid in ÷ Surrender value (dollars): 7 million yen ÷ 53,000 dollars ≒ 132.1 yen

In this example, you get an estimate that if the exchange rate to yen falls below approximately 132 yen per dollar, you will have less than the yen you paid in.

Just to be safe, let’s check what happens if the yen strengthens using the same formula. If the rate is 1 dollar = 130 yen, then 53,000 dollars × 130 yen = 6,890,000 yen. Even though the dollar amount has increased by 3,000 dollars, in yen terms, it is 110,000 yen less than the 7 million yen paid in. This calculation illustrates that “being protected in dollars” and “getting your money back in yen” are two different things.

Instead of feeling uneasy when you see news about a stronger yen, you can simply compare today’s rate with one specific number: the ‘break-even exchange rate’ for your paid-in yen.

Please calculate these same two figures using your own numbers.

This is as far as you need to go in the free section. Once you have these two numbers, your insurance policy has changed from something you were ‘vaguely worried about’ to ‘something you can evaluate with numbers’.

However, this estimate does not yet include everything. Which exchange rate will be used to convert to yen? Are there any fees deducted upon surrender? Will the Market Value Adjustment (MVA) affect your surrender value?Because of these three factors, the actual amount of yen you receive may deviate above or below your estimate.And to decide whether to keep holding it, you also need to return to the question of why you bought it in the first place.

Overall roadmap to deciding whether to keep holding it

In the paid section, using the estimates we calculated here as a starting point, we will follow these 12 steps to reach a decision on whether to keep holding your policy.

1. Read 5 figures from your policy, notices, or member page

2. Check the type of exchange rate and fees for converting to yen

3. Verify the existence and duration of surrender charges

4. Check for the existence of Market Value Adjustment (MVA)

5. Compare the yen at the time of payment with the current yen conversion value

6. Check for the existence of a target function

7. Confirm whether you can receive the payout in foreign currency

8. Redetermine whether your goal is death benefit protection or savings

9. Compare the three options: keep holding, surrender, or reduce the policy amount

10. Understand the basics of taxation upon surrender or maturity

11. Note down contact information for complaints and consultations

12. Record your final decision on a single sheet

In consultation settings, the points most often cited as “I hadn’t looked at that” are 3, 4, and 8. For those who think about the profit or loss of cancellation in terms of numbers, these three points will change the perspective.

What you will gain from here on

Ahead, there are 12 steps from (1) to (12) and a fill-in-the-blank takeaway ‘one-page judgment memo to decide whether to keep it’.

The 12 steps are written based on three points: “where to look on the document,” “who to ask and what to ask if you can’t find it,” and “what to write down as the answer.” For parts that differ by product, I have broken down exactly which column of which document to check. Tax-related information is limited to the scope that can be verified via the National Tax Agency’s Tax Answer service and is written based on information as of 2026.

The ‘one-page judgment memo to decide whether to keep it’ is a list with fill-in-the-blank fields where you can directly write down the numbers and answers gathered in the 12 steps. Since tables cannot be used in note, I have indicated the fill-in-the-blank fields as numbered items with lines. If you copy them into a memo app and fill in the blanks, you can talk at the insurance company or bank counter while looking at your notes.

Please consider this the cost of gathering the necessary information before deciding the destination of money in the range of several million yen.