Ace the Chartered Life Underwriter Challenge 2025 – Secure Your Success and Dominate the Exam!

Permanent insurance is designed to provide lifelong coverage for the insured individual, which is a fundamental aspect distinguishing it from term insurance. This type of insurance remains active for the entirety of the insured's lifetime, as long as the premiums are paid, ensuring that there is a death benefit regardless of when the insured passes away.

Additionally, permanent insurance often includes a cash value component, which builds over time as part of the policy. This cash value can be borrowed against or withdrawn by the policyholder, providing an additional financial resource that can be used during their lifetime. This feature adds to the policy's appeal, making it both a protection tool and a savings or investment vehicle.

In contrast, options that refer to low premiums or short durations generally pertain to term insurance, which does not accumulate cash value and is not designed for lifetime coverage. Similarly, terminology implying annual renewals is more fitting for term products where coverage is not permanent without ongoing renewal. Thus, the defining characteristic of permanent insurance lies in its lifelong coverage and cash value accumulation.