What 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 1 to 30 years. If the insured passes away within this term, the beneficiaries receive the death benefit. However, if the term expires and the insured is still alive, there is no payout, making it a more affordable option with lower premiums compared to whole life insurance.

Whole life insurance, on the other hand, offers coverage for the entire lifetime of the insured, as long as the premiums are paid. This type of insurance not only provides a death benefit but also accumulates cash value over time, which can be borrowed against or withdrawn under certain conditions. Whole life insurance tends to have higher premiums due to its lifelong coverage and cash value component.

While the other options mentioned pertain to various life insurance products or plans, they do not encompass the foundational categories of life insurance as fundamentally as term and whole life do. Understanding these two primary types is essential for anyone involved in life insurance to help clients choose the right policy based on their needs and financial goals.