What type of life insurance provides coverage for the insured's entire life and includes a cash value component?

Whole life insurance is designed to provide coverage for the insured's entire life, distinguishing it from term life insurance, which only offers coverage for a specified term. One of the key features of whole life insurance is the accumulation of a cash value component. Over time, as premiums are paid, a portion of those payments goes into a savings element that builds cash value. This cash value can typically be borrowed against or withdrawn, adding an additional layer of flexibility and financial planning to the policyholder.

Whole life insurance policies also often have fixed premiums and guarantees, which contrasts with other types such as universal life insurance, which can have flexible premiums but may not guarantee cash value growth. Variable life insurance also has a cash value component but is tied to investment options, making it subject to market fluctuations. Thus, whole life insurance stands out for its lifelong coverage and stable cash value growth, making it a foundational choice in life insurance planning.