What type of life insurance includes a cash value component?

The correct answer indicates types of life insurance that include a cash value component. Permanent insurance, which encompasses whole life insurance and variable life insurance, is designed to provide lifelong coverage as long as the premiums are paid.

With permanent insurance policies, a portion of the premium payments goes towards building cash value over time. This cash value grows on a tax-deferred basis and can be borrowed against or withdrawn during the insured's lifetime. Such features differentiate permanent insurance from term life insurance, which solely provides a death benefit and does not accumulate any cash value.

Both whole life and variable life insurance are specific types of permanent insurance. Whole life offers a guaranteed cash value and constant premiums, while variable life allows for investment options that can affect the cash value and death benefit.

The emphasis on having a cash value component is significant in understanding the various types of life insurance available to consumers and highlights the long-term savings aspect of permanent insurance products.