Life insurance can be divided into two basic categories: term life insurance and whole life insurance. Each type offers advantages for individuals. It is important to understand the differences between term life and whole life insurance when planning for your family's future.
Term life insurance provides coverage for a specific period of time or term. Policies may offer an initial term of 10, 15, 20 or 30 years. At the end of the initial term, the policy may be renewable for an additional number of years.
Whole life insurance provides coverage for the entire life of the insured. It also builds cash value that can be borrowed in the future. Cash value will grow to equal the amount of the death benefit at age 100.