Which of the following policies does not build cash value?

• A. Whole Life
• B. Term
• C. Universal Life
• D. Endowment

Answer: (B)

Cash value means a savings component within a life policy that grows over time and can be accessed or borrowed against. A term policy provides protection for a specific period and does not include any cash value accumulation. You pay premiums to maintain the coverage, and once the term ends, there’s no cash value to tap or withdraw.

In contrast, permanent policies are designed to build cash value. Whole life has a guaranteed cash value that grows as premiums are paid. Universal life develops cash value based on credited interest and can vary with account performance. Endowment policies combine a death benefit with a cash-savings element and typically mature with cash value as well.

So the policy that does not build cash value is the term policy. (Note: some term plans offer a return of premiums option, but that is not cash value accumulated inside the policy and cannot be borrowed against.)