How can a policyholder access the cash value of their Variable Life Insurance policy?

A policyholder can access the cash value of their Variable Life Insurance policy primarily through three methods: withdrawing funds, taking a loan against the cash value, or surrendering the policy altogether.

When a policyholder chooses to withdraw funds, they can take a partial withdrawal directly from the accumulated cash value, which reduces the death benefit accordingly. Taking a loan against the cash value allows the policyholder to borrow against the money that has built up, usually at a lower interest rate, while still keeping the policy in force, though it is important to note that any unpaid loans will reduce the policy's death benefit. Surrendering the policy enables the policyholder to end the insurance coverage and receive the full cash value, but this action often comes with significant implications for coverage and might involve surrender charges, especially in the early years.

The other options do not effectively relate to the methods through which cash value can be accessed. Selling the policy does not direct the policyholder to access their cash value but rather transfers ownership, while requesting a payment from an insurer’s headquarters and converting the policy to a whole life insurance policy does not provide a straightforward means of accessing cash value. Each of these methods emphasizes the flexibility that Variable Life Insurance offers, making option B the most accurate