Let’s break down the different types of life insurance — so you can choose what fits your life, budget, and goals without any confusion.

1.⁠ ⁠Term Life Insurance

Provides coverage for a specific period (e.g., 10, 20, or 30 years). It pays a death benefit if the insured dies during the term. This is the most affordable and straightforward type of life insurance.

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2.⁠ ⁠Whole Life Insurance

A type of permanent insurance that covers you for your entire life, as long as premiums are paid. It includes a guaranteed death benefit and a cash value component that grows over time.

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3.⁠ ⁠Universal Life Insurance

Also permanent coverage, but with more flexibility. Policyholders can adjust premiums and death benefits. It also accumulates cash value, which earns interest based on market rates or a minimum guaranteed rate.

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4.⁠ ⁠Variable Life Insurance

Combines permanent coverage with investment options. The cash value can be invested in sub-accounts (similar to mutual funds), which can grow or shrink based on market performance. More risk, but potential for higher rewards.