What type of policy allows the insured to borrow against the cash value?

Whole Life Insurance is designed to build cash value over time, which serves as a component of the policy. As the policy accumulates cash value, the insured has the option to borrow against this accumulation. This feature allows policyholders to access funds for various needs without having to surrender the policy or its benefits. The loan does incur interest, and if it's not repaid, it will reduce the death benefit payable to beneficiaries.

In contrast, Term Life Insurance does not accumulate cash value at all; it provides coverage only for a specified period and does not offer any loan options. Universal Life Insurance also builds cash value, similar to Whole Life Insurance, but it provides more flexibility in premium payments and death benefit options. However, the specific characteristic of borrowing against cash value is most commonly associated with Whole Life Insurance due to its level premiums and guaranteed cash value growth. An Accidental Death Policy does not have any cash value component and specifically provides coverage in the event of accidental death.