What does whole life insurance primarily provide?

Whole life insurance primarily provides a death benefit coupled with a cash value component. This type of insurance is designed to offer lifelong coverage, meaning that it remains in effect for the insured's entire life, as long as the premiums are paid.

The cash value aspect is significant because it grows at a guaranteed rate over time, allowing policyholders to accumulate savings within the policy. This cash value can be borrowed against or withdrawn under certain conditions, providing a source of funds that can be utilized during the policyholder's lifetime.

Moreover, when the insured passes away, the policy pays out a death benefit to the beneficiaries, which can provide financial support. The dual nature of whole life insurance—offering both a death benefit and a cash value—makes this option distinct from other types of life insurance, such as term insurance, which solely provides a death benefit without any cash accumulation.

Thus, the integration of these two elements ensures that whole life insurance serves both protective and savings functions for policyholders and their families.