What are the two main types of life insurance?

Term life insurance and permanent life insurance represent the two primary categories of life insurance. Term life insurance provides coverage for a specific period, typically ranging from one to thirty years. If the insured person passes away during this term, the beneficiary receives a death benefit. However, if the policyholder outlives the term, there is no payout, and the coverage ceases unless renewed.

Permanent life insurance encompasses various types, including whole life, universal life, and variable life insurance. This type of insurance provides coverage for the insured's entire lifetime, as long as premiums are paid. Permanent policies also include a cash value component that grows over time, allowing policyholders to borrow against it or withdraw funds during their lifetime.

By categorizing life insurance this way, it helps both producers and consumers understand the fundamental features and purposes of different life insurance products, aiding in making informed decisions based on individual financial needs and goals.