Utah Life Producer Practice Exam

Whole life insurance is designed to provide both a death benefit and a cash value component that grows over time. This type of policy is typically maintained for the insured's entire life, as long as premiums are paid. The cash value of a whole life policy accumulates on a tax-deferred basis, meaning that policyholders can access this value through loans or withdrawals during their lifetime.

In contrast, term life insurance does not build any cash value; it solely provides coverage for a specified period and pays a death benefit only if the insured passes away during that term. Accidental death insurance is also limited to benefits that pay out only in the event of accidental death without any cash value component. Critical illness insurance is designed to provide financial support in the case of a serious health condition and does not involve cash value growth. Therefore, whole life insurance stands out as the only option that both provides lifelong coverage and accumulates cash value over time.