Which type of policy accumulates cash value and provides coverage for the insured's lifetime?

Whole life insurance is the type of policy that accumulates cash value while providing coverage for the insured's entire lifetime, as long as premiums are paid. This type of coverage ensures that beneficiaries will receive a death benefit upon the insured's passing, which can provide financial security and peace of mind. Additionally, the cash value component grows at a guaranteed interest rate, allowing policyholders to borrow against it or withdraw funds if needed. Whole life insurance offers stability and predictability, which are appealing features for individuals seeking lifelong coverage with a savings element.

In contrast, term life insurance provides coverage for a specified period and does not accumulate cash value. Universal life insurance offers flexibility in premium payments and death benefits, and while it also accumulates cash value, it is distinct from whole life insurance in terms of structure and premium payment flexibility. Variable life insurance allows policyholders to invest the cash value in various investment options, which can lead to changes in the death benefit and cash value based on market performance, differentiating it from the fixed returns of whole life insurance.