There are three main types of life insurance: term life insurance, whole life insurance, and universal life insurance. Each has its own set of benefits and drawbacks, so it's important to understand the differences before choosing a policy.
Term life insurance is the most basic and affordable type of life insurance. It provides coverage for a set period of time, usually 10-30 years. If you die during the term of the policy, your beneficiaries will receive a death benefit. If you live past the term, the policy expires and you will not receive a death benefit.
Whole life insurance is a more permanent type of life insurance. It remains in force until you die, as long as you continue to pay the premiums. Whole life insurance also builds cash value, which you can borrow against or cash in if you need the money.
Universal life insurance is a type of permanent life insurance that offers flexible premiums and death benefits. Universal life insurance also has a cash value component, which grows tax-deferred. You can use the cash value to help pay premiums or for other purposes.
