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What distinguishes whole life insurance from term life insurance?

Whole life insurance includes no cash value

Whole life insurance does not expire and builds cash value

Whole life insurance is distinct from term life insurance in that it does not expire and builds cash value over time. This means that whole life insurance provides coverage for the entirety of the insured's life, as long as the premiums are paid. In addition, a portion of the premium payments for whole life insurance goes towards building cash value, which can grow over time and can be accessed by the policyholder for loans or withdrawals.

This characteristic of accumulating cash value adds a savings component to whole life insurance, making it both a life insurance product and an investment vehicle. This differs fundamentally from term life insurance, which provides coverage for a specified period (the "term") and generally does not accumulate cash value. Therefore, the correct distinction emphasizes the lifelong coverage and the cash value aspect of whole life insurance.

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Whole life insurance is cheaper than term life insurance

Whole life insurance only covers death due to accidents

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