What is a primary characteristic of whole life insurance?

Whole life insurance is primarily characterized by its ability to build cash value over time. This cash value accumulation is a distinguishing feature that sets whole life insurance apart from other types of life insurance, such as term insurance, which does not have a cash value component.

As policyholders pay premiums, a portion of their payment goes into the cash value account, which grows at a guaranteed rate set by the insurer. This accumulation can be borrowed against or withdrawn during the policyholder's lifetime, providing financial flexibility beyond just the death benefit.

The other options do not accurately represent whole life insurance: it does not provide only temporary coverage, as it is designed to last a lifetime; it is generally more expensive than term insurance due to the cash value component and guaranteed benefits; and it does not require annual renewal, which is a feature of term policies that provide coverage for a specific period that needs to be renewed or converted.