What is a characteristic of whole life insurance?

Whole life insurance is designed to provide coverage for the insured’s entire lifetime, as long as the premiums are paid. This type of policy guarantees that the death benefit will be paid no matter when the insured passes away, up to the age of 100. At this point, the policy might endow, meaning the cash value builds to match the death benefit, and the insurance company typically pays the policyholder the amount as a lump sum if they reach that age.

This characteristic distinguishes whole life insurance from term life insurance, which is only effective for a specific number of years. Additionally, whole life insurance policies do not cease coverage or reduce benefits based on the age of the policyholder as long as premiums are maintained. This ensures lifelong protection, which is a key feature appreciated by individuals seeking financial security for their beneficiaries.