What characteristic is typical of cash value life insurance?

Cash value life insurance is designed with a component that allows it to accumulate cash value over time, which can be borrowed against or used for other financial needs. This characteristic distinguishes it from term life insurance, which provides a death benefit for a specific period but does not build any cash value.

As the policyholder pays premiums, a portion of those payments goes into the cash value component, which grows at a specified rate, often tax-deferred, until the insured reaches a certain age or until they decide to surrender the policy. This provides not only a death benefit but also a savings element, reinforcing the versatility of cash value life insurance as a financial planning tool.

The other choices present characteristics that do not align with cash value life insurance. For example, it does not exclusively cover short terms, nor is it designed primarily for any demographic segment like young, single individuals. Additionally, while certain types of life insurance can be renewable annually, that aspect is more commonly found in term life insurance rather than cash value policies.