What does a policyholder receive upon making a partial withdrawal from their policy?

When a policyholder makes a partial withdrawal from their life insurance policy, they typically reduce the death benefit or the cash value of the policy. This is because a partial withdrawal involves taking out some of the accumulated cash value, which impacts the total value of the benefits associated with the policy.

In practical terms, when the policyholder withdraws an amount, the insurance company deducts that amount from the overall cash value or death benefit. As a result, the remaining coverage or accumulated cash value is lower than it was before the withdrawal. This is crucial for policyholders to understand, as it directly affects the amount that their beneficiaries would receive in the event of the policyholder's death, as well as the potential cash value available in the future.

While other options may refer to aspects of life insurance policies, they do not directly address the mechanics of what happens during a partial withdrawal. A full refund of premiums would imply a different scenario, such as a cancellation of the policy, a change in benefits might refer to changes made at a policy's renewal, and a loan against the cash value involves different terms and conditions compared to a straightforward withdrawal. Therefore, the most appropriate outcome of making a partial withdrawal is a reduction in the death benefit or cash value.