Life Insurance Policies
Term insurance
Term is pure protection with no cash value: level, decreasing, increasing, annually renewable, convertible (to permanent within a stated window, typically without new evidence of insurability), and return of premium. Renewable term guarantees the right to renew at a higher premium.
Whole life
Permanent, level premium, guaranteed cash value, guaranteed death benefit. Varieties include ordinary (paid to 100 or 121), limited-pay (20-pay, paid-up at 65), single premium, and modified or graded premium with a lower early premium.
Universal and variable
Universal life unbundles the elements: flexible premium, adjustable death benefit, current interest credited, and monthly cost of insurance deducted. Option A is a level death benefit; Option B adds cash value, so the benefit grows. Variable life and variable universal put cash value in separate accounts with market risk; they are securities requiring a securities registration and a prospectus. Indexed universal life credits interest linked to an index, subject to a cap, floor, and participation rate.
Other forms
Endowment (cash value equals face at a stated age), juvenile, family policy, and joint and last-survivor.
Traps
Dividends are not guaranteed and are a return of premium, not taxable income until they exceed basis. Universal life is not guaranteed to stay in force unless a no-lapse guarantee applies. Variable products require two licenses.
Rule of thumb: if the question mentions separate accounts, a prospectus, or market risk, the answer is a variable product.