What is a key feature of a cash value life insurance policy?

A cash value life insurance policy is designed to accumulate cash value over time, which is one of its defining features. The correct choice highlights that a policyholder can access a loan value based on the cash accumulation after making the first premium payment. This is significant because it allows policyholders to borrow against the cash value of their policy, providing them with liquidity and flexibility in financial matters.

The cash value grows at a certain rate and can be utilized for various purposes, including paying premiums, supplementing retirement income, or covering emergencies. This feature differentiates cash value policies, such as whole and universal life insurance, from term life insurance, which does not build cash value and is only in force for a specified period.

Other options do not accurately reflect the characteristics of cash value life insurance; for instance, having no cash value after the first year is contrary to how these policies are structured. Similarly, the notion of coverage ending at a specified age or only covering accidental death does not pertain to cash value life insurance, which typically provides lifelong coverage or coverage until specified conditions are met.