What can policyholders do with the cash value of a "whole life" policy?

Policyholders of a "whole life" insurance policy have the ability to borrow against or withdraw from the cash value of the policy. This feature is one of the key benefits of whole life insurance, as it allows policyholders to access their accumulated cash value, which grows at a guaranteed rate over time.

Whole life policies are designed to provide both a death benefit and a savings component. The cash value accumulates as premiums are paid, and it grows on a tax-deferred basis. Policyholders can tap into this cash value in two main ways: by taking out a policy loan or by making a withdrawal.

When a policyholder borrows against the cash value, they can use the funds for various needs, such as education, home purchases, or emergencies. It's important to note that any amount borrowed will reduce the death benefit until it is repaid. Additionally, withdrawals can be made, though this might reduce the overall cash value and the death benefit as well.

This option provides significant financial flexibility for policyholders, making whole life insurance not just a life insurance policy but also a potential financial resource throughout their lives.

The other choices do not accurately reflect the options available to policyholders in relation to the cash value of a whole life policy. Selling