There are 2 types of life insurance, term and whole life.
Term life only pays when the death happens during the life of the term, which can be anywhere from one year to 30 years. And term is broken down into level and decreasing term. Level pays the same amount through out the time of the policy whereas decreasing term goes down as the term gets closer to ending.
The advantage of term life is that it is cheap. The disadvantage is when the term is up you will have to sign up for insurance again. The older you get the harder and more expensive it is get life insurance.
Whole life pays no matter how old you are. Whole life insurance is broken down into three types: traditional, universal and variable.
Traditional life covers the same payment no matter what age is reached. Usually premiums are kept up so the insurance companies can use that money as an investment to cover the cost of the policy. The insurance holder has the right to cash in the amount if they decide to cancel the policy
Universal life is based on cash value. The money that is collected is invested in some type of financial index. Variable life also is based on cash value but can be invested different types of investment accounts. If the account rises in value then the payout while be greater when collected.
The advantage of whole life is that it is permanent. The disadvantage of whole life is it is more expensive.
