Final answer:
The life insurance policy that offers a level face amount and cash value is known as Whole Life insurance. This type includes an investment component, allowing the policy to build cash value over time, making it a significant asset for the policyholder.
Step-by-step explanation:
A life insurance policy that provides a policy owner with both a level face amount and a cash value is known as Whole Life insurance. This type of insurance is designed for long-term coverage and includes an investment component that allows the cash value to accumulate over time. In contrast, Term Life insurance is for a specified period and does not include a cash value, Universal Life offers flexible premiums and may include a cash value, and Variable Life allows for investment in various accounts that can lead to varying cash values and death benefits.
Many individuals hold various types of insurance to protect against different life events, such as health, auto, home, and life events. Cash-value life insurance not only serves as death benefit protection but also accumulates a cash account which can be utilized by the policyholder. Additionally, some policies may permit the insured to borrow against this accumulated value, subject to repayment with interest.