What do you call the provision that allows a policyholder to surrender their life insurance policy for its cash value?

The provision that allows a policyholder to surrender their life insurance policy for its cash value is known as the Cash Surrender Value Provision. This provision is important as it provides the policyholder with an option to access the cash accumulated in the policy when they choose to terminate or no longer need the coverage.

The cash surrender value is typically available in permanent life insurance policies, such as whole life or universal life, where a cash value component builds over time. When a policyholder decides to utilize this provision, they receive the cash value minus any applicable surrender charges and outstanding loans against the policy, if any. This option can be beneficial if financial situations change, allowing the policyholder to recoup some of their investment in the policy rather than letting it lapse or continuing to pay premiums without receiving any return.

The other options provided do not fit this definition. The Face Value Provision relates to the amount payable upon the insured's death, the Loan Provision outlines terms for borrowing against the policy, and the Dividend Provision pertains to the payment of dividends on participating policies.