Which of the following can be considered a disadvantage of high surrender charges in early years of a policy?

High surrender charges in the early years of a life insurance policy can indeed create a disadvantage by increasing the risk of policy lapse. This can occur because if a policyholder decides to surrender their policy or withdraw cash value, they may face significant fees that reduce the amount they receive. As a result, a policyholder might find themselves with a lower incentive to maintain the policy, especially if their financial situation changes and they need immediate funds. The perception of a high cost associated with withdrawing value may discourage individuals from continuing with the contract, increasing the likelihood that they will let the policy lapse altogether.

This enhances the vulnerability of the policyholder, as it may lead to a loss of coverage, leaving them without the intended life insurance benefits. Therefore, the risk of policy lapse becomes a critical matter directly associated with the negative implications of high surrender charges in the early years.