Which type of insurance policy typically accumulates cash value over time?

A Whole Life Policy is designed to accumulate cash value over time, making it a unique type of permanent life insurance. Unlike term life policies, which only provide coverage for a specified term and do not accumulate any cash value, whole life insurance builds cash value at a predetermined rate as premiums are paid over the life of the insured. This cash value can be utilized by the policyholder in various ways, such as borrowing against it or withdrawing funds, while still keeping the death benefit intact.

The cash value component is one of the defining features of whole life insurance, ensuring that it not only serves as a protective measure for beneficiaries upon the death of the insured but also acts as a savings mechanism for the policyholder. This accumulation effect occurs because a portion of the premium is allocated to the cash value, allowing it to grow over time, often with certain guarantees, depending on the terms of the policy.

In contrast, term life policies strictly provide a death benefit for a limited period and do not accumulate any value. Accidental death policies offer coverage specifically for deaths resulting from accidents without building cash value, and mortgage life insurance is intended to pay off a mortgage in the event of the borrower's death but also does not accumulate cash value. Thus, the whole life