Which type of insurance is designed to accumulate cash value over time?

Whole life insurance is designed to accumulate cash value over time, making it a key feature of this type of policy. Whole life insurance provides coverage for the entire lifetime of the insured, as long as premiums are paid. In addition to the death benefit, it includes a savings component known as cash value, which grows at a guaranteed rate set by the insurance company. Policyholders can borrow against this cash value or withdraw it for various needs, providing both protection and a potential financial resource.

In contrast, term life insurance offers coverage for a specific period without any cash value accumulation; it simply pays a death benefit if the insured passes away during the term. Universal life insurance also offers an accumulation of cash value but typically with more flexibility in premium payments and death benefits compared to whole life insurance. Decreasing term life insurance, on the other hand, provides a death benefit that decreases over time and does not accumulate cash value at all. Thus, whole life insurance is the correct answer as it specifically focuses on the accumulation of cash value as a fundamental part of its benefits.