Whole life insurance provides both insurance coverage and a savings component with unique features like cash value loans and nonforfeiture values.
Whole life insurance functions as both insurance coverage and a savings account, accumulating cash value over time that can be withdrawn. Unlike term life insurance, whole life provides coverage for the entire lifetime of the policyholder.
One key feature of whole life insurance is the option for cash value loans, allowing policyholders to borrow against the accumulated cash value. These loans can be beneficial in times of financial need but may affect the overall policy value.
Nonforfeiture values are also significant in whole life insurance, offering policyowners the ability to maintain some benefits even if they stop paying premiums, ensuring that the policy does not become obsolete.
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