What is a whole life insurance policy characterized by?

A whole life insurance policy is characterized by its ability to accumulate cash value over time while providing lifelong coverage. This means that in addition to offering a death benefit, a portion of the premiums paid goes towards building cash value. This cash value grows at a guaranteed rate set by the insurer and can be accessed by the policyholder through loans or withdrawals during their lifetime.

The policy remains in force as long as the premiums are paid, ensuring that the insured has coverage that lasts their entire life. This dual benefit of both death benefit protection and cash value accumulation is what distinguishes whole life insurance from other types of policies, such as term life, which only provides coverage for a specified period without any savings component.