Life insurance is typically purchased to replace income, cover debts like mortgage and credit cards and expenses like education.  It is also used as an inheritance to family members or just to cover final expenses. 

The two primary life insurance options are term and and permanent. Then there are sub products underneath permanent, whole and Universal. 

Term is like being a renter, permanent is being an owner!

Term Policy

The coverage remains in place only until the end of the term is reached. Common term lengths are 15, 20, and 30 years. At the end of the term, the coverage ceases and the death benefit ceases with no surrender value.

Permanent life

Provides lifelong coverage and the opportunity to build cash value, which accumulates on a tax-deferred basis. You can also tap into the policy’s cash value while you’re alive.

Permanent life insurance policies include whole life and universal life.

Whole life

Offers fixed and guaranteed premiums and death benefits as well as a guaranteed rate of return to build cash value.

Universal life insurance (UL)

Offers more flexibility than whole life. You can adjust your premium payments and death benefit. And with an indexed universal (IUL) policy the amount above the cost of insurance gets invested into an index fund typically tied to the S&P 500 which may mean greater returns than a whole life policy.  You can take withdrawals or loans or use the greater expected returns to pay the premium in retirement years.