Which statement accurately describes a feature of permanent life insurance?

Permanent life insurance is designed to provide lifelong coverage, as opposed to term life insurance, which only covers a specific period. One of the most significant features of permanent life insurance is its ability to accumulate cash value over time. As policyholders make premium payments, a portion of those payments is directed to a cash value component, which grows at a specified interest rate, and sometimes it can even grow based on market performance, depending on the type of permanent policy.

This cash value can be accessed by the policyholder through loans or withdrawals, providing financial flexibility. In contrast, term life insurance ends when the term is over, does not build cash value, and requires ongoing premium payments for the coverage duration. Additionally, permanent insurance typically requires ongoing premium payments for as long as coverage is maintained, and it does not have a limit on coverage years. Thus, the correct statement accurately identifies the core advantage of permanent life insurance in terms of financial accumulation and long-term planning.