Which type of policy might apply surrender charges during early years of withdrawal?

The appropriate policy type that might apply surrender charges during the early years of withdrawal is universal life insurance. Universal life insurance is a flexible permanent life insurance product that allows policyholders to adjust their premiums and death benefits. However, because of the structure of these policies, especially in the initial years, there may be surrender charges if the policyholder decides to withdraw funds or reduce their investment within a certain period after the policy is issued.

Surrender charges are designed to cover the insurer's expenses for acquiring the policy and can penalize early withdrawals to discourage policyholders from discontinuing the policy shortly after it is taken out. As the policy matures and the policyholder remains committed over time, these charges typically decrease and eventually disappear.

Term life insurance, on the other hand, is temporary coverage with no cash value or surrender charges, as it provides protection for a specific time period and does not accumulate savings. Whole life insurance does build cash value but typically has different provisions regarding withdrawals and loans rather than specific surrender charges. Group life insurance is a type of coverage usually provided through an employer and does not accumulate cash value or have surrender charges.