Which are the two main types of life insurance?

The two main types of life insurance are term life insurance and whole life insurance.

Term life insurance provides coverage for a specified period, typically ranging from one to thirty years. It is designed to pay a death benefit if the insured passes away during that term. This type of insurance is often more affordable than permanent policies, making it a popular choice for individuals seeking coverage to protect their loved ones during specific financial responsibilities, such as raising children or paying off a mortgage.

Whole life insurance, on the other hand, is a type of permanent insurance that provides coverage for the entire lifetime of the insured, as long as premiums are paid. In addition to a death benefit, whole life insurance also includes a cash value component that grows over time at a guaranteed rate. This cash value can be accessed by the policyholder during their lifetime, allowing for flexibility in financial planning.

Together, these two types represent the primary categories of life insurance, one focusing on temporary needs and the other on lifelong coverage and savings. The other options include variations and specific types of life insurance that may not encompass the broad categories that term and whole life represent.