Is Life Insurance An Investment? 
Life insurance is , at its core , protection against loss . Term life insurance is `` pure '' protection , as it has no cash value . Permanent insurance combines pure protection with accumulation of cash value . Whole and Universal Life policies usually do not exceed a certain amount of cash value so that they keep their tax favored status . If they are overfunded , or if Indexed or Variable products are used , the policy may become a modified endowment contract and gains are subject to income tax . Some people call that type of policy an investment . 