What characteristic defines permanent life insurance?

Permanent life insurance is defined by its ability to accumulate cash value over time. This characteristic distinguishes it from term life insurance, which provides coverage only for a specified period and does not build cash value. The cash value component allows the policyholder to not only have life insurance protection but also to build an asset that can be borrowed against or withdrawn, enhancing the financial planning aspects of the policy.

In contrast to the other statements, coverage being temporary does not apply to permanent life insurance, as it provides lifelong coverage as long as premiums are paid. The assertion that no premium payments are required is inaccurate; permanent life insurance typically requires ongoing premium payments to maintain both the life coverage and the cash value accumulation. Finally, while the cash value can be accessed by the policy owner through loans or withdrawals, the idea that it cannot be accessed goes against a fundamental benefit of permanent life insurance, making the understanding of cash value accumulation essential in recognizing its advantages.