Which type of life insurance typically accumulates cash value over time?

Whole life insurance is designed to accumulate cash value over time, making it a popular choice for individuals looking for both life insurance protection and a savings component. This type of policy offers lifelong coverage as long as the premiums are paid and part of those premiums is allocated towards building cash value. The cash value grows at a guaranteed rate set by the insurer and can potentially earn dividends depending on the specific whole life policy.

In contrast, term life insurance provides coverage for a specified period but does not build cash value since it is purely designed to pay a death benefit if the insured passes away during the term. Accidental death insurance specifically pays out a benefit in the case of accidental death and does not have a cash value component. Variable term insurance typically refers to term policies that may have varying premiums or benefits but still do not accumulate cash value. Therefore, whole life insurance stands out as the option that not only provides coverage but also a financial asset that policyholders can access in the future.