What is a feature of whole life insurance?

Whole life insurance is characterized by its combination of insurance protection and a savings component. This means that, in addition to providing a death benefit to the policyholder's beneficiaries upon their passing, whole life insurance also accumulates cash value over time. This cash value grows at a guaranteed rate and can be borrowed against or surrendered for cash, providing a financial resource to the policyholder during their lifetime.

This fundamental dual-purpose aspect of whole life insurance distinguishes it from other types of life insurance, such as term life insurance, which only offers death benefits without any savings or investment features. The integration of life insurance protection with a savings mechanism makes whole life policies appealing for individuals looking for long-term financial planning solutions.