The purpose of life insurance is to protect and financially support loved ones through a payout upon the death of the insured person.
There are two main types of life insurance. Term life insurance provides coverage for a set period of time and simply expires if you’re still alive at the end of it, or stop paying in the meantime. You can choose to decrease or keep your level of coverage consistent over the term.
Permanent life insurance costs more, but it provides coverage across your entire lifetime and usually includes an investment element. Put simply, this means that a portion of the premiums you pay to stay covered is invested – and if you decide to cancel your insurance, the policy may have a “cash surrender value”. Depending on your preferences around flexibility and risk, you can choose among subtypes such as Whole, Universal, and Variable Universal, with the latter two allowing you to adjust premiums, as well as coverage levels.