What is a "whole life" insurance policy?

A "whole life" insurance policy is indeed a policy that provides coverage for the insured's entire life and includes a cash value component. This type of insurance offers lifelong protection as long as premiums are paid, unlike term life insurance which is typically limited to a specific period.

The cash value component is significant because it accumulates over time, allowing the policyholder to borrow against it or even withdraw funds if needed. This adds a savings-like feature to the insurance policy, making it distinct from other types such as term insurance, which does not build cash value.

Additionally, whole life insurance policies often come with a fixed premium that does not increase over time, adding a layer of financial predictability and security for the policyholder. This combination of lifelong coverage and cash value accumulation makes whole life insurance a fundamental product in personal finance and family planning.