Final answer:
The true statement about whole life insurance is that the policyowner can borrow against the policy's cash value. Coverage is permanent, not temporary, and the death benefit can be reduced by outstanding loans. Therefore, all provided statements are false, and the correct answer is 'None of the above are true'.
Step-by-step explanation:
Examining the provided options about whole life insurance, we need to identify the statement that is true. Whole life insurance is a type of permanent life insurance that remains in effect for the insured's whole life and includes a cash value component, as well as a death benefit. Policyholders are indeed allowed to take out a loan against the policy's cash value, but not up to the face value; instead, it's based on the cash value that has accumulated over time. Therefore, the correct statement about whole life insurance is that policyholders can borrow money against the policy based on the accumulated cash value, not the face amount.
Coverage for whole life insurance is not temporary; it is permanent as long as the premiums are paid. Lastly, the death benefit is indeed affected by outstanding loans. If there is an outstanding loan balance at the time of the policyholder's death, the death benefit is reduced by the amount of the outstanding loan and any associated interest.
In summary, out of the given statements, the one that is true concerning whole life insurance is that the policyowner can take out a policy loan, but it is based on the accumulated cash value, not up to the face amount. Therefore, option A is false, option B is false, and option C is false, making the correct option 'None of the above are true'.