What type of financial product combines investment and insurance features?

Indexed universal life insurance is a type of financial product that seamlessly combines investment and insurance features. It provides the policyholder with life insurance coverage, while also accruing cash value based on the performance of a stock market index. This allows for potential growth of the investment component without the direct risk associated with the stock market. The cash value grows tax-deferred, and policyholders can access these funds through loans or withdrawals, giving them flexibility in managing their financial goals.

Whole life insurance primarily focuses on providing a guaranteed death benefit and also has a savings component, but its investment returns are usually fixed and lower compared to indexed universal life. Term life insurance, on the other hand, offers only a death benefit for a specified term without any cash value, making it purely insurance without investment features. Variable annuities do combine investment elements, but they are specifically designed for retirement income rather than life insurance, making them a different financial product altogether.