What are the two main types of life insurance?

The classification of life insurance into two main types is predominantly recognized as term life insurance and permanent life insurance. Term life insurance provides coverage for a specified period, typically ranging from one year to several decades. If the insured passes away during that term, the policy pays a death benefit to the beneficiaries. If the policyholder survives the term, the coverage ends without any payout.

Permanent life insurance, on the other hand, encompasses various types of insurance that provide lifetime protection as long as the premiums are paid. This category includes whole life insurance and universal life insurance, both of which build cash value over time and offer flexibility in premium payments and death benefit amounts.

Understanding these two main types helps individuals and families make informed decisions regarding their life insurance needs, ensuring they select a policy that aligns with their financial goals and circumstances.