Which type of life insurance provides permanent coverage and includes a savings component?

Whole life insurance provides permanent coverage and includes a savings component, making it a unique and valuable type of life insurance. The permanent nature of whole life insurance means that it is designed to last for the insured's entire lifetime, as long as premiums are paid. This differentiates it from term life insurance, which is only in effect for a specified term and does not build any cash value.

The savings component of whole life insurance is often referred to as the cash value. A part of each premium payment is allocated towards this cash value, which grows over time on a tax-deferred basis. Policyholders can borrow against the cash value, withdraw funds, or surrender the policy for its cash value if needed. This dual benefit of providing a death benefit along with a savings or investment element makes whole life insurance a comprehensive life insurance option.

In contrast, universal life insurance and variable life insurance also provide permanent coverage and have savings components, but they differ from whole life insurance in their structure and management of cash value. Universal life insurance offers more flexibility in premium payments and death benefits, while variable life insurance allows policyholders to invest the cash value in various investment options, which can lead to greater potential growth but also greater risk. Whole life insurance's fixed premiums and guaranteed