Which statement accurately characterizes a cash value life insurance policy?

A cash value life insurance policy is designed to accumulate cash value over time, which the policyholder can tap into during their lifetime. One of the significant features of this type of policy is that the insured can take a loan against the accumulated cash value. This means that the policyholder can borrow money from the insurance company, using the cash value as collateral, without having to surrender the policy. The loan will accrue interest, and if not repaid, the death benefit paid to beneficiaries will be reduced by the outstanding loan amount.

This characteristic sets cash value policies apart from term life insurance, which provides a death benefit but does not accumulate cash value and does not allow for loans against a cash value, making option B the correct choice. Understanding this feature is crucial for policyholders as it provides financial flexibility in times of need while still maintaining life insurance coverage.