What does whole life insurance provide?

Whole life insurance is designed to provide both a death benefit and a cash value accumulation feature. When a policyholder pays premiums on a whole life insurance policy, a portion of that money goes toward building cash value over time. This cash value component grows at a guaranteed rate, allowing the policyholder to borrow against it or withdraw funds during their lifetime.

In addition to the cash value accumulation, whole life insurance guarantees a death benefit that will be paid to the beneficiaries upon the policyholder's passing, provided premiums are paid as scheduled. This dual benefit of a guaranteed death benefit and cash value accumulation makes whole life insurance a popular choice for individuals seeking both protection and a savings component in one policy.

The other options do not reflect the comprehensive features of whole life insurance. Some options may suggest limited benefits that do not align with the fundamental structure and purpose of whole life insurance.