Which of the following statements about whole life insurance is true?

Whole life insurance is a type of permanent life insurance that is designed to provide coverage for the insured person's entire life, as long as premiums are paid. One of the defining features of whole life insurance is that it offers both a death benefit and a cash value accumulation component.

As premiums are paid, a portion goes toward the cost of insurance, while the remainder contributes to the cash value, which grows over time at a guaranteed rate. This accumulation of cash value can be accessed by the policyholder through loans or withdrawals, providing a living benefit that can be utilized before the insured's death.

This dual benefit of providing a death benefit and accumulating cash value distinguishes whole life insurance from term life insurance, which only provides a death benefit without any cash value growth. In addition, whole life insurance generally has higher premiums compared to term life insurance, which is purely for coverage over a specific term without any cash accumulation. It also does not require renewal at the end of a term, as the coverage remains in force for the entire lifetime of the insured as long as premiums are paid.