What are the two main types of life insurance?

The two main types of life insurance are term life insurance and whole life insurance because they represent the two primary categories that encompass how policies function and the benefits they provide.

Term life insurance is straightforward, providing coverage for a specified period (the "term") and paying a death benefit only if the insured passes away during that period. It tends to be more affordable than permanent coverage, making it accessible for individuals seeking temporary financial protection for a particular need, like raising children or paying off a mortgage.

Whole life insurance, on the other hand, is a form of permanent life insurance that offers coverage for the lifetime of the insured as long as premiums are paid. It includes a savings component, or cash value, which grows over time and can be borrowed against or withdrawn. This dual benefit of lifelong coverage alongside a cash value accumulation distinguishes whole life insurance and contributes to its appeal for those seeking long-term financial planning.

While other choices listed include types of insurance products, they fall under broader specialties or variations within the main categories of life insurance. For example, universal life and variable life insurance are types of permanent insurance options, but they are not considered main categories. Accidental death insurance and critical illness insurance are not life insurance policies in the traditional sense, as they