What characteristic distinguishes whole life insurance from term life insurance?

Whole life insurance is characterized by its accumulation of cash value over time, which is a significant distinction from term life insurance. While term life insurance provides coverage for a specific period (the "term") and only pays a death benefit if the insured dies during that term, whole life insurance is designed to last for the insured's entire lifetime.

The cash value component of whole life insurance grows at a guaranteed rate and can be accessed by the policyholder through loans or withdrawals, offering an additional financial resource. This feature can also provide a sense of security and savings, as the cash value can serve as an emergency fund or be utilized for various financial needs throughout the policyholder's life.

In contrast, term life insurance has no cash value and typically does not develop any savings component; it is purely a death benefit insurance, providing coverage for a limited time.