Which insurance option allows borrowing against cash value?

The insurance options that allow borrowing against cash value are both Universal Life insurance and Whole Life insurance. This ability to borrow against the cash value is a distinctive feature of permanent life insurance policies, which include both of these types.

Universal Life insurance is designed to provide flexibility in terms of premium payments and death benefits. It builds cash value over time, which policyholders can borrow against, providing access to funds when needed. This can be particularly beneficial for policyholders who require liquidity or wish to take out loans for personal expenses while still maintaining a life insurance policy.

Whole Life insurance also accumulates cash value, which policyholders can borrow against. This type of policy typically offers fixed premiums and a guaranteed death benefit, along with a guaranteed cash value growth rate. The ability to take loans against the cash value can be used for various purposes, such as emergencies or investment opportunities.

In contrast, Term Life insurance does not build cash value. It provides coverage for a specific period and is primarily designed to offer a death benefit, but it does not accumulate any cash value that can be borrowed against. Therefore, the option that includes both Universal and Whole Life insurance as allowing borrowing against cash value is accurate.