What allows the owners of universal life insurance policies to withdraw some of the cash value?

The owners of universal life insurance policies are permitted to withdraw some of the cash value through partial surrenders. Universal life insurance is designed with a cash value component that accumulates over time. Policyholders have the flexibility to access this cash value while still maintaining the life insurance coverage.

Partial surrenders allow the policyholder to take out a portion of the accumulated cash value without having to terminate the policy entirely, which would occur with a full cash surrender. This method enables policyholders to access funds for emergencies, investments, or other financial needs while keeping their insurance policy active, albeit potentially altering the death benefit and cash value.

The other options do not directly provide for the withdrawal of cash value in the same manner. Full cash surrender terminates the policy and pays out the entire cash value, premium loans involve borrowing against the cash value rather than withdrawing it, and tax-free withdrawals refer to specific circumstances under which funds may be taken without tax implications, but are not a withdrawal mechanism in themselves. Therefore, partial surrenders are the correct mechanism for accessing cash value within a universal life policy.