Life Insurance
Term Life Insurance
Term life insurance provides benefit to the beneficiary when the insured passes away. This type of insurance should be considered to protect your spouse or children in the event the future stream of income does not continue. Term life is the cheaper of the two life insurance options. It can provide coverage with a level premium over a period of 10 or 20 years. The premium paid is generally lower when the insured is in good health or younger and does not smoke.
Whole Life Insurance
Whole Life Insurance is made up of two components: savings and insurance component. The first few years of the policy will pay mostly for the commission of the salesperson that sold the policy with little or now cash value while still providing coverage for the insured. In later years, the savings part of the whole life policy will increase in cash value where the interest on the cash will be enough to pay for the insurance portion of the policy.