What type of insurance plan provides protection and savings?

The choice of a permanent plan is correct because it is specifically designed to provide lifelong coverage along with a savings component known as cash value. Unlike temporary plans, which offer coverage for a limited period and do not build cash value, permanent plans accumulate savings over time as policyholders pay their premiums. This cash value grows on a tax-deferred basis and can be accessed during the policyholder's lifetime through loans or withdrawals, making permanent plans a valuable financial tool for both protection and savings.

Participating plans and non-participating plans refer to whether policyholders can receive dividends, but they do not inherently relate to the nature of coverage duration or savings accumulation as a permanent plan does. Thus, permanent plans stand out for their dual benefit of providing lifelong insurance protection and a savings mechanism.