Question

Ronald's variable life insurance policy allows him to borrow from his cash value at zero net interest cost once the policy has been in effect for a certain period of time. What feature of his policy allows him to do this?

Answer 1

Ronald's variable life insurance policy allows him to borrow from his cash value at zero net interest cost due to the cash value accumulation feature.

Step-by-step explanation:

The feature of Ronald's variable life insurance policy that allows him to borrow from his cash value at zero net interest cost is the cash value accumulation.

Cash-value (whole) life insurance policies not only provide a death benefit but also accumulate a cash value over time. This cash value can act as an account that Ronald can borrow from without incurring any net interest cost.