What is a major distinction between whole life and term life insurance?

The major distinction between whole life and term life insurance lies primarily in the cash value component associated with each policy type. Whole life insurance is designed to provide lifelong coverage and also includes a cash value component that builds up over time, which can be accessed through loans or withdrawals. In contrast, term life insurance is intended to provide coverage for a specified term, such as 10, 20, or 30 years, and typically does not accumulate cash value.

Thus, the option highlighting that term life insurance usually has no cash value accurately reflects this critical difference between the two types of insurance policies. While term life may be renewable, that renewal does not change its fundamental structure, which lacks a cash value feature. This distinction is important for individuals considering their insurance options based on their long-term financial planning needs.