An interest-sensitive life policyowner may withdraw the policy's cash value without charge under a provision called?

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Prepare for the Pennsylvania Life Insurance Exam. Use flashcards and multiple-choice questions, each with hints and explanations. Get ready for your certification!

Multiple Choice

An interest-sensitive life policyowner may withdraw the policy's cash value without charge under a provision called?

Explanation:
Partial surrender. In interest-sensitive life policies, you can access part of the accumulated cash value without terminating the contract by taking a partial surrender. This keeps the policy in force, and the withdrawal is not a full surrender, so there’s no surrender of the policy itself and typically no surrender charge for that portion. However, the cash value and often the death benefit are reduced by the amount withdrawn, and there can be tax implications depending on the policy and amount withdrawn.

Partial surrender. In interest-sensitive life policies, you can access part of the accumulated cash value without terminating the contract by taking a partial surrender. This keeps the policy in force, and the withdrawal is not a full surrender, so there’s no surrender of the policy itself and typically no surrender charge for that portion. However, the cash value and often the death benefit are reduced by the amount withdrawn, and there can be tax implications depending on the policy and amount withdrawn.

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