What is a common feature of whole life insurance?

Whole life insurance is distinguished by its commitment to provide lifelong coverage and a valuable feature known as guaranteed cash value. This cash value accumulates over time at a guaranteed rate, enabling policyholders to borrow against it or withdraw from it under certain circumstances. The cash value is a significant benefit, as it represents a forced savings component that can be used to supplement income during retirement or in times of financial need.

In contrast, flexible premiums are characteristic of universal life insurance rather than whole life policies, which typically have fixed premiums. Limited coverage periods align with term life insurance, where coverage is only active for a specific timeframe. Variable interest rates, often associated with variable life insurance, do not apply to whole life policies, which guarantee a consistent cash value growth. Therefore, the guaranteed cash value is a defining feature of whole life insurance, reflecting the product's security and long-term financial planning aspects.