The problem of valuation of life insurance payments with policyholder behaviour is studied. First a simple survival model is considered, and it is shown how to modify cash ows without policyholder behaviour to include surrender and free policy behaviour, by calculation of simple integrals. In the second part, a more general disability model with recovery is studied, and it is shown that valuating cash ows in this model is a problem of calculating a modi ed Kolmogorov differential equation. This method has been suggested recently in Buchardt et al. We conclude the paper with numerical illustrations showing the importance of modelling policyholder behaviour.