Final answer:
The true statement about whole life insurance is that a policyowner can take out a policy loan against the accumulated cash value. Coverage is not temporary; it lasts the insured's entire life, and the death benefit could be reduced by outstanding loans. Option ais correct.
Step-by-step explanation:
Among the choices provided concerning whole life insurance, the statement that is true is that a policyowner can take out a policy loan against the cash value of the policy, not up to the face amount. This means that if you have accumulated a certain cash value in your whole life policy, you may borrow against that value. It's important to mention that the death benefit may indeed be affected by outstanding loans if not repaid, and coverage is not normally temporary but rather intended to last for the insured's entire life, assuming premiums are paid.
All of the statements concerning whole life insurance are false, EXCEPT the death benefit is not affected by outstanding loans. Whole life insurance policies have a cash value component that policyowners can borrow against in the form of policy loans. These loans can be taken up to the face amount of the policy and must be paid back with interest.