Which insurance policy type offers savings that grows over time?

Universal life insurance stands out as a policy type that offers a savings component that grows over time. It is a form of permanent life insurance that combines a death benefit with a cash value feature. As premiums are paid, a portion goes toward the insurance coverage, while the rest is allocated to the cash value account. This cash value accumulates interest over time based on a rate specified by the insurer, which can vary according to the policy terms.

Additionally, policyholders have the flexibility to adjust their premiums and death benefits, and they can also access the cash value through loans or withdrawals, providing both a layer of security and an opportunity for savings growth. This flexibility and the potential for cash value accumulation make universal life insurance a suitable choice for individuals looking for a policy that not only provides life coverage but also serves as a savings vehicle.

In contrast, term life insurance strictly offers death benefit protection for a specified period without any cash value accumulation. Accidental death and dismemberment insurance provides benefits only in cases of specified accidents and does not accumulate savings. Group life insurance typically provides coverage to members of a group, such as employees, without a personal cash value component, focusing solely on providing death benefits.