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, usually ranging from a few years to several decades. It pays a death benefit only if the insured passes away during the term of the policy. This type of insurance is often more affordable and is typically chosen by individuals seeking temporary coverage, such as those with dependents or debts that will be settled over time.

Whole life insurance, on the other hand, is a form of permanent insurance that provides lifelong coverage, as long as the premiums are paid. In addition to the death benefit, whole life policies build cash value over time, which can be borrowed against or withdrawn. This makes it a more complex product, often appealing to those who seek both a death benefit and a savings component.

The other options include forms of insurance that do not pertain directly to life insurance, such as health and disability insurance. These serve different purposes focused on medical expenses and income replacement respectively, rather than providing financial support after death, which is the primary function of both term and whole life insurance.