What is whole life insurance?

Whole life insurance is a type of permanent insurance designed to provide coverage for the insured's entire lifetime, as long as the premiums are paid. One of the defining features of whole life insurance is that it includes a cash value component that accumulates over time. This means that a portion of the premium payments goes toward building a cash value that the policyholder can borrow against or withdraw later on if needed.

The lifetime coverage aspect ensures that the beneficiaries will receive a death benefit whenever the insured passes away, providing financial security regardless of when that may occur. This insurance option often appeals to individuals looking for stability and long-term financial planning, as it can also serve as a forced savings vehicle through the cash value accumulation.