A contract with both insurance and investment components to it:
- It pays a stated amount upon the death of the insured
- It accumulates cash value the policy holder can redeem or borrow against.
It is a type of life insurance that provides a set amount of coverage for your entire life. You pay the same premium amount for the life of the policy, so you always know what to expect. In addition to providing a death benefit, whole life policies build cash value over time – money you can use if the need arises.
All life insurance companies are regulated.