Which term refers to how easily cash can be obtained from a life insurance policy?

The term that refers to how easily cash can be obtained from a life insurance policy is liquidity. In the context of life insurance, liquidity illustrates the accessibility of cash values that can be drawn upon, either through policy loans or withdrawals, without significantly impacting the policy's benefits.

A life insurance policy, particularly whole life or universal life, may accumulate a cash value over time, and the ease of accessing that amount signifies its liquidity. This characteristic is important for policyholders who might need cash for emergencies or unexpected expenses and may opt to use the cash value of their policy rather than liquidate other investments.

Indemnity typically refers to compensation for a loss or damage rather than cash accessibility in life insurance. Premium is the payment made for the insurance policy, and rider denotes an additional provision or endorsement that modifies the original terms of the policy. Neither of these terms captures the aspect of accessing cash from a policy like liquidity does.