Rhode Island Life Insurance Practice Exam 2026 – The All-in-One Guide to Ensure Your Exam Success!

Whole life insurance is a type of policy that offers the policyowner both a level face amount and the ability to accumulate cash value over time. This is a fundamental characteristic of whole life insurance, as it provides lifelong coverage as long as premiums are paid, while also building a cash value that can be accessed by the policyholder. The cash value grows at a guaranteed rate and can be borrowed against or withdrawn if needed.

In contrast, term life insurance does not build cash value; it solely provides death benefit protection for a specific term. Universal life insurance does offer cash value but features flexible premiums and adjustable death benefits, which may not be level. Variable life insurance also has a cash value component but allows for investment in various investment options, meaning both the cash value and face amount can fluctuate. Whole life insurance’s stability and guaranteed components account for its unique position among these types.