What type of life insurance provides a guaranteed cash value?

Whole life insurance is designed to provide not only a death benefit but also a guaranteed cash value component. This means that as premiums are paid, a portion of that payment accumulates over time into a cash value that grows at a guaranteed rate set by the insurer. This cash value can be accessed by the policyholder during their lifetime through loans or withdrawals, making it a unique feature of whole life policies. Additionally, the cash value will not decrease as long as premiums are paid, providing financial security and a savings component within the policy.

In contrast, term life insurance does not have any cash value associated with it; it only provides coverage for a specific period. Universal life insurance includes flexible premium payments and an investment component, but while it may accumulate cash value, it is not guaranteed, as it can fluctuate based on market conditions. Variable life insurance also has a cash value component, but that value can vary significantly depending on the performance of investments chosen by the policyholder, making it less predictable than the guaranteed cash value of whole life insurance.