Which policy typically has cash value available for loans?

Whole life insurance is the correct answer because it is designed to build cash value over time. This cash value accumulates on a tax-deferred basis and can be accessed by the policyholder through loans or withdrawals. When a policyholder takes a loan against the cash value, they can use these funds for various purposes, such as personal expenses or investments.

In contrast, term life insurance does not have a cash value component; it provides coverage for a specified period and pays a death benefit only if the insured dies within that term. Critical illness insurance offers a payout only upon diagnosis of a specified serious illness, so there is no cash value accumulation. Disability insurance provides income replacement if the insured becomes unable to work due to a disability; it also does not accumulate cash value. Thus, whole life insurance stands out as the policy that allows for loans based on its accumulating cash value.