Which statement accurately describes whole life insurance?

Whole life insurance is designed to provide both a death benefit and a cash value component, making it a staple in financial planning for long-term security. One of the key features of whole life insurance is that it offers fixed premiums and a guaranteed death benefit. This means that the premiums remain constant throughout the life of the policyholder, and the death benefit does not change, ensuring predictability in both payment and coverage over time.

The fixed nature of premiums ensures that policyholders can budget for their insurance costs with certainty, which is a significant advantage for long-term planning. Additionally, while there is a cash value component that can grow over time, the primary characteristics of whole life insurance are its fixed premiums and the stability of its death benefit. This predictability is particularly valuable for individuals who seek lifelong coverage without surprises regarding premium increases or fluctuating death benefits.

In summary, the defining features of whole life insurance's fixed premiums and death benefits align perfectly with the characteristics described in the correct statement.