What are the two main types of life insurance?

The two main types of life insurance are categorized as term and permanent. Term life insurance provides coverage for a specific period, typically ranging from a few years to several decades, with a death benefit paid out only if the insured passes away during that term. This type of insurance is often chosen for its affordability and straightforward structure, making it a popular choice for those who need coverage for a stipulated duration, such as while raising children or paying off a mortgage.

Permanent life insurance encompasses various types, including whole life, universal life, and variable life insurance. These policies provide coverage for the entire lifetime of the insured, as long as the premiums are paid, and they often have a savings or investment component that can accumulate cash value over time. This is essential for individuals looking for lifelong financial protection and the potential to build wealth.

The other options mentioned do not fully capture the main categories of life insurance. While whole and universal life insurance are types of permanent life insurance, they do not represent the complete distinction between term and permanent classifications. Similarly, variable life insurance is a type of permanent insurance, but does not reflect the broader categories when compared to term life. Thus, term and permanent accurately encapsulate the primary divisions in life insurance offerings.