Certified Financial Planner (CFP) Practice Exam · Question
Scenario 42: Which type of life insurance typically has a cash value component that can be borrowed against?
Whole life insurance is a permanent life insurance policy that builds cash value over time, which can be accessed through loans or withdrawals. The correct answ
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Question: Scenario 42: Which type of life insurance typically has a cash value component that can be borrowed against?
Answer options:
- Term life insurance
- Creditor life insurance ✅ Whole life insurance
- Group life insurance
Correct answer: Whole life insurance
Explanation: Whole life insurance is a permanent life insurance policy that builds cash value over time, which can be accessed through loans or withdrawals. The correct answer is "Whole life insurance". This capacity-fill scenario 42 reinforces the same competency for the cfp bank and follows the certified explanation standard.
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