Which of the following accurately describes whole life insurance?

Whole life insurance is a type of permanent life insurance that provides coverage for the insured's entire lifetime, as long as the premiums are paid. One of the key features of whole life insurance is its cash value component. This cash value accumulates over time, allowing policyholders to build savings within their policy. The cash value grows at a guaranteed rate set by the insurer and can be accessed through loans or withdrawals, providing policyholders with a financial resource during their lifetime.

The first option refers to term insurance, which is designed to provide coverage for a specific period rather than the policyholder's lifetime. The third option suggests that whole life insurance is typically less expensive than term insurance, which is generally not true; whole life premiums are often higher because of the lifelong coverage and cash value benefits. The fourth option indicates that premiums do not need to be paid after a certain age, which is not accurate for whole life insurance, as premiums are required throughout the life of the policy unless paid in full or structured with a paid-up option.