Answer – B. (It includes and investment component)
Permanent insurance has two key financial components, namely, the death benefit component and the cash value component. The cash value component is the investment component. It is the cash value component that accumulates cash value that the policy holder may withdraw or borrow against. The death benefit component refers to the amount that is to be paid to a beneficiary upon the death of an insured person.
Option A is wrong because permanent insurance, as the name implies provides permanent protection, and not just for a specific periodOption C is wrong because permanent insurance is not relatively low cost. On the contrary, it is relatively high cost when compared with temporary insurance.
