Which policy type typically includes a savings component?

Whole life insurance is designed to provide coverage for the insured's entire life, as long as premiums are paid. One of the defining features of a whole life policy is its savings component, often referred to as the cash value. This cash value accumulates over time on a tax-deferred basis, meaning that policyholders can access these funds through loans or withdrawals while still maintaining their life insurance coverage.

In contrast, term life insurance provides coverage for a specific period and does not build any cash value; it is purely a protection policy. Universal life insurance also offers a savings component, but it is more flexible in terms of premium payments and death benefits. Variable life insurance carries investment options that can affect cash value and death benefit, but the key characteristic of whole life policies is their consistent approach to both protection and savings accumulation throughout the insured's life.