What is the main purpose of using bonds, treasuries, and mortgages in Whole Life Insurance?

In the context of Whole Life Insurance, using bonds, treasuries, and mortgages serves a significant purpose in ensuring that the policy endows properly. Whole Life Insurance is designed to provide both life insurance coverage and a cash value component that accumulates over time.

The cash value component is backed by conservative, stable investments such as bonds and treasuries, which are known for their reliability and lower risk. This investment strategy is crucial in guaranteeing that the insurer can meet its obligations to policyholders, including the provision of the death benefit and the accumulated cash value. By utilizing these secure investments, insurers can ensure that the funds necessary to support the maturity or endowment of the policy when it reaches its designated age are available.

Thus, the primary purpose of employing these financial instruments within Whole Life Insurance is to maintain the integrity and the promise of the policy's benefits, ensuring that they are funded appropriately and that the policy performs as expected for the policyowners.