What characterizes whole life insurance?

Whole life insurance is characterized by its provision of coverage for the insured’s entire lifetime, as long as premiums are paid as required. This type of policy combines a death benefit with a savings component, which accumulates cash value over time. The cash value can be borrowed against or withdrawn by the policyholder, providing both a safety net and a financial resource.

This distinct feature allows whole life insurance to serve both as a long-term protection policy and a potentially growing asset. As the policyholder ages, the policy does not expire, unlike term insurance, which has a specific duration. The certainty of lifelong coverage gives peace of mind, ensuring that beneficiaries will receive a death benefit regardless of when the policyholder passes away, provided that the policy is active.