What distinguishes Whole Life insurance from Term Life insurance?

Whole Life insurance is characterized by its permanent nature, meaning it provides coverage for the insured's entire lifetime, as long as premiums are paid. What truly sets Whole Life insurance apart is its ability to build cash value over time, which can be an attractive feature for policyholders. This cash value accumulation occurs as part of the policy's structure, allowing the policyholder to borrow against it or even surrender the policy for its cash worth if needed.

In contrast, Term Life insurance offers coverage for a specified period, or term, and does not accumulate cash value. Once the term expires, the policyholder may need to renew or purchase a new policy to continue coverage, which can come at a higher cost as they age. This key difference emphasizes the stability and potential financial benefits of Whole Life policies, making it ideal for individuals looking for long-term insurance solutions alongside a savings component.