If a life insurance policy has a savings/cash value feature, which of the following is true?

A life insurance policy that includes a savings or cash value feature is typically designed to accumulate a financial reserve over time, making options like universal life insurance a prime example. Universal life policies are flexible permanent life insurance products that combine life insurance protection with a cash value component, allowing policyholders to build savings that can grow over time. This cash value can also be accessed for loans or withdrawals, serving as an additional financial resource during the policyholder's lifetime.

The presence of a cash value feature generally indicates that the policy is more than just a pure risk management tool; it provides a savings element that can contribute to the overall financial planning goals of the insured. Term policies, on the other hand, do not offer a cash value component and are solely designed to provide coverage for a specific period.

While it is true that policies with savings or cash value features, such as permanent insurance, often come with higher premiums than term insurance, that aspect does not directly relate to the question of which type of policy incorporates a cash value. Thus, stating that it could be a universal life policy correctly identifies the type of life insurance that typically includes cash value options.