Life Insurance is divided into two broad categories
1. Term Life Insurance
Initial Lower Cost: Premiums can be lower during the early years of coverage.
The Need for life insurance isn't permanent: lasts for a limited, pre-determined number of years. Commonly called "Time Insurance" because it provides for specific, short-term needs.
It Can be Convertible: Option to switch to permanent life insurance coverage without having to show evidence of good health.
2. Permanent Life Insurance
Level premiums: Premium payments can remain the same; in later years, premiums can be lower than term.
The need for life insurance is permanent: coverage can last a lifetime.
To provide an accessible source of tax-free funds: accumulates cash value that can be used for retirement, college education, or emergencies.
Tax advantages: Properly funded and structured, can provide a tax-free income stream and tax-deferred wealth accumulation.