Final answer:
The characteristic that does not apply to whole life insurance is that the cash value is not a nonforfeiture benefit, when in fact, it is. Whole life insurance policies do have a cash value component, which policyholders can access and which serves as a nonforfeiture benefit.
Step-by-step explanation:
The question asks for identification of an inapplicable characteristic of whole life insurance from the provided options. Among the characteristics listed, the incorrect one, or the exception, is that "The cash value in a permanent life insurance policy is not a nonforfeiture benefit."
In fact, one of the key aspects of whole life insurance is that it does offer a cash value component that acts as a savings account and can accumulate tax-deferred over the life of the policy. This cash value is indeed considered a nonforfeiture benefit because if the policy is surrendered before the death of the insured, the policy owner is still entitled to receive the accumulated cash value.
The other options provided describe accurate characteristics of whole life insurance: it is designed to provide permanent protection, establishing policy premiums based on the insured's age at issue, and it includes living benefits in addition to the death benefit.