Which type of insurance policy typically includes a cash value component?

Whole life insurance typically includes a cash value component that grows over time. This cash value is part of the policy and accumulates on a tax-deferred basis, meaning policyholders can borrow against it or withdraw from it during their lifetime, providing a source of funds if needed. This feature distinguishes whole life insurance from term life insurance, which provides coverage for a specified period but does not build any cash value. Accidental death insurance provides benefits only in the case of death resulting from an accident, and it does not have a cash value aspect. Short-term health insurance is designed to cover health expenses for a limited period and does not include an investment or cash value component. Whole life insurance therefore stands out as the option that combines di­rect insurance protection with a savings element.