Life Insurance Policies
Term insurance
Term covers a stated period and builds no cash value: level term, decreasing term (mortgage protection), increasing term, annually renewable term (rising premium, renewable to a stated age), and convertible term. Term buys the largest death benefit per premium dollar for a temporary need.
Permanent insurance
Whole life: level premium for life or a limited period (20-pay, paid-up at 65, single premium), guaranteed cash value, guaranteed death benefit, participating (dividends) or nonparticipating. Universal life: flexible premium and adjustable death benefit, cash value credited current interest, with Option A (level death benefit) or Option B (increasing). Guaranteed universal life trades cash value for a low no-lapse premium. Variable life and variable universal life place cash value in a separate account; the policyowner bears investment risk, and the sale requires a securities license and a prospectus. Indexed universal life credits interest by an index with a cap and a floor.
Other policies
Survivorship (second-to-die) pays on the second death, typically for estate liquidity; joint (first-to-die) pays on the first. Endowment matures at a stated date. Modified and graded-premium whole life trade early cash value for a lower early premium. Group, credit, industrial, and juvenile policies carry their own rules.
Rule of thumb: match product to need and time horizon - maximum death benefit per premium dollar for a temporary need means term; a lifelong need with cash accumulation means permanent. Trap: term never has cash value, and variable products shift investment risk to the owner, not the insurer.