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Which feature is unique to whole life insurance compared to term life insurance?

Q: Which feature is unique to whole life insurance compared to term life insurance?

Cash value that accumulates on a tax-deferred basis — The defining feature of whole life — and all permanent life insurance — is the cash value account that grows tax-deferred over the policy's life. The owner can borrow against it, surrender the policy for it, or use it to pay future premiums. Term life provides no cash value: every premium dollar buys pure death-benefit protection for the term. The other choices either describe features shared by both types (death benefit during coverage) or features that belong to different products (premium flexibility is universal life; automatic annual renewal is annually renewable term). Per the Florida Agent's Health & Life Exam Content Outline §I.A.

AA guaranteed death benefit during the policy term

BA premium that can be skipped without consequence

CCoverage that automatically renews each year

Cash value that accumulates on a tax-deferred basis

Why this is the answer

The defining feature of whole life — and all permanent life insurance — is the cash value account that grows tax-deferred over the policy's life. The owner can borrow against it, surrender the policy for it, or use it to pay future premiums. Term life provides no cash value: every premium dollar buys pure death-benefit protection for the term. The other choices either describe features shared by both types (death benefit during coverage) or features that belong to different products (premium flexibility is universal life; automatic annual renewal is annually renewable term). Per the Florida Agent's Health & Life Exam Content Outline §I.A.

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