The provision that allows an interest-sensitive life policyowner to withdraw the policy's cash value interest-free is called what?

• A. Partial surrender
• B. Policy loan provision
• C. Cash value withdrawal
• D. Surrender charge waiver

Answer: (A)

Accessing the policy’s cash value without paying interest involves a withdrawal that reduces the cash value but keeps the policy active. The term for taking only part of the cash value out this way is partial surrender. Since you’re taking out cash value rather than borrowing against it, no interest is charged, and the death benefit is reduced by the amount withdrawn (and there may be surrender charges or tax implications depending on the policy).

This differs from a policy loan, which borrows against the cash value and always incurs interest. The choice described as a cash value withdrawal is a general idea of taking out cash, but the specific provision that leaves the policy in force while reducing cash value is best described as a partial surrender. A surrender charge waiver isn’t the mechanism for accessing cash value.