1. Term Life Insurance
Term life insurance is literally an insurance policy that lasts for a particular set term of time. From 10, 20, 30 years or more, these policies are in effect offering a specific dollar amount of coverage for those who are insured, if they were to die during the term that has been specified.
For the most part, term insurance costs substantially less than other options. There is a simple reason for this. You will not necessarily die within the term of the insurance policy. Therefore, the insurance company is taking a gamble that you will live until the term is out and that you will have paid your premiums while not dying, so they don’t have to make a payout and get to keep all the money you put in.
If you do have a term life insurance policy, and it runs out, most insurance companies will offer you the chance to renew it, but it will be at a cost. You will pay more each time you renew, since the company will be taking a bigger gamble, as the odds you will die go up the older you are.
2. Whole Life Insurance
This is a policy that you purchase one time and it will follow you for the rest of your life. Once you sign up for a whole life insurance policy, you will be covered from that day until the day you die with no rate hikes or renewals necessary. However, it will cost more. Since it is a given that you are eventually going to die, and therefore the policy will be cashed in, these policies are often more expensive than term life insurance policies
In addition to knowing that there will be a payout, there is another reason many people like whole life insurance policies. They can set up a payment plan so the policy is paid off in 20 or 25 years. For those who buy these policies young, that means you can have your whole life insurance policy paid off before you get into your retirement years, where your income may be dramatically reduced.
The selection of a life insurance plan will differ by your needs, your wants and your budget the key is to know what's out there and then to make an intelligent decision as to what would be best for you.