What type of insurance policy might offer a cash value feature?

Universal life insurance is a type of permanent life insurance that does indeed offer a cash value feature. This type of policy combines a death benefit with a savings component that builds cash value over time. Policyholders have the flexibility to adjust their premiums and the face amount of the policy, making it distinct from term life insurance, which provides coverage for a specific term without any cash value accumulation.

As premiums are paid, part of the payment goes into the cash value, which can grow based on a specified interest rate. The owner can borrow against this cash value or withdraw funds, providing an additional layer of financial flexibility that term life and supplemental insurance policies do not offer. Decreasing term life insurance, on the other hand, is designed for temporary coverage needs, typically decreasing in face value over time and does not accumulate cash value.