What is a common feature of all permanent life insurance policies?

A distinguishing characteristic of permanent life insurance policies is that they accumulate cash value over time. This means that a portion of the premiums paid into the policy goes towards building a cash reserve that can grow on a tax-deferred basis. This cash value can be borrowed against, withdrawn, or used to pay premiums, providing policyholders with flexibility and access to funds while still maintaining life insurance coverage.

The accumulation of cash value is a fundamental difference from term life insurance, which provides coverage for a specified period but does not build any cash value. Additionally, permanent policies are designed to provide lifelong coverage as long as premiums are paid, rather than requiring renewal like term policies. This makes the cash value feature not only a key component of permanent policies but also a significant consideration for individuals looking for financial planning strategies that include insurance as an investment component.