What is a common feature of whole life insurance policies?

A common feature of whole life insurance policies is the guaranteed cash value accumulation over time. Whole life insurance is designed to provide lifelong coverage, and it includes a savings component known as cash value. This cash value grows at a guaranteed rate, allowing policyholders to build equity in their policy over the life of the insurance contract.

As the policyholder pays premiums, a portion of these payments goes toward the cash value, which accumulates tax-deferred. This feature not only provides a financial resource that can be accessed through loans or withdrawals but also adds an element of savings to the insurance coverage. This distinguishes whole life policies from term life insurance, which typically does not offer any cash value accumulation.

The other features listed do not align with the fundamental nature of whole life insurance. For example, while term life insurance may initially have lower premiums, whole life policies are generally more expensive due to their lifelong coverage and cash value component. Flexible coverage terms are more characteristic of universal life policies, which allow for adjustments in premiums and death benefits. Paying only in the case of accidental death refers to accidental death and dismemberment policies, which is not a feature of whole life insurance.