Which option allows a policyholder to surrender their policy for cash value?

The option that allows a policyholder to surrender their policy for cash value is indeed the policy surrender option. This option provides the policyholder the flexibility to terminate their life insurance policy and receive the accumulated cash value, if any, minus any surrender charges or outstanding loans against the policy. This cash value is a portion of the policy that builds up over time and can be accessed by the policyholder based on the terms of the policy.

The other options do not provide this same functionality. The loan option allows the policyholder to borrow against the cash value of the policy but does not involve surrendering the policy. The policy conversion option refers to converting a term life policy into a permanent life policy without requiring evidence of insurability, but it does not pertain to accessing cash value. Lastly, the premium waiver option is a provision that allows the policyholder to stop paying premiums if they become disabled, but again, this does not involve surrendering the policy for cash. Thus, the policy surrender option clearly aligns with the ability to receive cash value from the policy.