Which of the following policies does NOT build cash value?

• A. Term
• B. Whole life
• C. Universal life
• D. Variable universal life

Answer: (A)

Cash value is the savings component that some life insurance policies build up over time. Term insurance is defined by providing pure death benefit protection for a set period and does not include a savings component, so there is no cash value accumulating. The other policy types are designed to accumulate cash value: whole life builds it as part of a guaranteed, ongoing premium and benefit structure; universal life allocates part of the premium to a cash account that earns interest and can grow; and variable universal life uses investment performance in separate accounts to determine the cash value. Because term lacks that savings feature, it does not build cash value.