What is a primary characteristic of whole life insurance?

Whole life insurance is designed to provide lifelong protection, and one of its primary characteristics is its ability to build cash value over time. This cash value accumulates at a guaranteed rate and can be accessed by the policyholder through loans or withdrawals, allowing them to use the money for various needs, such as emergencies or other financial goals. The accumulation of cash value distinguishes whole life insurance from term life insurance, which does not have any cash value component.

This cash value feature not only enhances the overall value of the policy but also serves as a financial resource that policyholders can tap into if necessary. The guarantee of cash value growth is a key incentive for many people to choose whole life insurance as part of their long-term financial planning.