What aspect distinguishes whole life insurance from term life insurance?

Whole life insurance is distinguished from term life insurance primarily by its inclusion of a cash value component. This cash value is a savings element that accumulates over time as part of the policy. As policyholders continue to pay their premiums, a portion of these payments goes into building the cash value, which can be borrowed against or even withdrawn under certain conditions. This feature allows the policy to serve not only as a death benefit for the insured's beneficiaries but also as a financial asset for the policyholder.

In contrast, term life insurance provides only a death benefit with no cash accumulation or savings aspect. It is designed to cover a specific period (the "term") and does not build any value that the policyholder can utilize while they are alive. Therefore, this cash value component is what fundamentally differentiates whole life insurance from term life insurance.