What defines permanent life insurance?

Permanent life insurance is defined as a type of policy that ensures coverage for the entire life of the insured, as long as premiums are paid, and it incorporates a cash value component that grows over time. This cash value can be accessed by the policyholder through loans or withdrawals, providing a financial benefit beyond just the death benefit.

This distinguishing feature of permanent life insurance sets it apart from other types of life insurance, such as term life insurance, which only provides coverage for a specified period without any cash value. Additionally, permanent policies tend to have structured premium payments that may build cash value over the life of the policy, ensuring lifelong coverage and a potential financial asset.

The other options describe specific characteristics of different types of insurance. For example, the option that describes insurance lasting for a specific term refers to term life insurance, which does not accumulate cash value. The mention of no premiums after a certain age relates more to certain arrangements like paid-up policies but does not define permanent life insurance entirely. Lastly, the option about short-term coverage is typical of term insurance, which can be renewed but does not reflect the nature of permanent life insurance.