PSI Life Exam Practice Test 2026 – Complete Preparation Resource

Universal Life insurance policies allow for partial surrenders, which means policyholders can withdraw a portion of the cash value accumulated within the policy without having to terminate the policy entirely. This flexibility is one of the key features of Universal Life insurance, making it an appealing option for individuals who may need to access cash during their lifetime while still retaining some insurance coverage.

In contrast, Term Life insurance is designed to provide coverage for a specified term without any cash value component, meaning there is no ability to make partial surrenders. Whole Life insurance also offers a cash value, but typically any access to cash would involve policy loans rather than direct surrenders, and the policy may lapse if the cash value is wholly withdrawn. Group Life insurance, on the other hand, is generally a type of coverage provided by employers or organizations that does not offer cash value or surrender options. Therefore, Universal Life stands out for its feature of allowing partial surrenders, providing policyholders with both insurance protection and liquidity.