What is a key feature of whole life insurance?

A key feature of whole life insurance is that it provides guaranteed payouts upon the death of the insured. This means that the beneficiaries of the policy will receive a death benefit that is defined in the policy, regardless of when the insured passes away, as long as the premiums have been paid. This characteristic is fundamental to whole life insurance, making it an attractive option for those seeking lifelong coverage and a reliable financial safety net for their loved ones.

In contrast, temporary coverage is typically associated with term life insurance, which has a specific duration and pays out only if the insured dies within that term. The notion that premiums increase over time is also not applicable to whole life policies, as they generally have level premiums that remain the same throughout the life of the policy. Lastly, whole life insurance does accumulate cash value over time, which can be borrowed against or withdrawn, providing flexibility and additional financial resources to the policyholder. These aspects make the guaranteed death benefit an essential feature of whole life insurance, distinguishing it from other forms of life insurance.