PSI Life Exam Practice Test 2026 - Free Life Insurance Exam Questions and Study Guide

Whole life insurance provides the policyholder with permanent coverage, meaning that the insurance remains in force for the insured's entire lifetime as long as premiums are paid. This type of policy also includes a cash value component, which distinguishes it from term life insurance. Over time, as premiums are paid, a portion of those premiums accumulates as cash value that the policyholder can borrow against, withdraw, or use in other ways, such as purchasing additional insurance.

This combination of permanent coverage and a cash value feature makes whole life insurance a unique product within the life insurance market, offering both financial protection for beneficiaries and a savings component that can grow over time. Other types of insurance, such as term or temporary life insurance, do not offer this cash value component and are effective only for a specified term, which is why these alternatives are not suitable options for someone seeking the benefits offered by whole life insurance.