What happens to the cash surrender value (CSV) of a whole life policy over time?

The cash surrender value (CSV) of a whole life policy is designed to increase over time. Whole life insurance provides a savings component along with the death benefit, which means that a portion of the premium payments goes towards building cash value. This cash value grows at a guaranteed rate set by the insurance company, and in many policies, it can also earn dividends that further contribute to the CSV.

As the insured individual continues to pay premiums, the cash value accumulates, generally increasing steadily. This means that the longer the policy is held, the greater the CSV becomes, providing the policyholder with financial flexibility, such as the option to borrow against the policy or surrender it for cash.

In contrast to the other options, the gradual increase in CSV is a fundamental characteristic of whole life insurance, reflecting the policy's dual function as both protection and a savings vehicle. Thus, it is this continuous growth aspect that justifies the selection of this option as the correct answer.