What type of life insurance accumulates cash value?

Whole life insurance is a type of life insurance that accumulates cash value over time. This cash value is a savings component that grows at a guaranteed rate and is typically available for the policyholder to borrow against or withdraw. Unlike term life insurance, which provides coverage for a specific period without any cash value component, whole life insurance is designed to last for the insured's entire lifetime, as long as premiums are paid.

The cash value can be beneficial for policyholders, as it can serve as a financial resource during the policyholder's lifetime. Additionally, upon the policyholder's death, the beneficiary receives the death benefit that is also typically tax-free. This dual functionality of providing both a death benefit and a savings element is a significant characteristic of whole life insurance that distinguishes it from other forms of life insurance.