Life insurance policies, in general, provide protection to your family and loved ones in the event of your death, or provide a cash value payout at some point in your life. There are many varieties of life insurance, each designed according to the level of protection that you need, as well as the stage in your life. Some differences between the various types of policies are the term of coverage, premium costs, and whether a cash value is accrued.

There are two main categories of life insurance - Term Life or Whole Life Insurance. Term life insurance policies provide a low-cost way to get maximum insurance protection for a set period of time at a fixed cost. It pays only a death benefit and builds no cash values. Whole life, or permanent life, insurance policies provide lifelong protection and usually require premiums to be paid for the entire time the insured is living. While more costly, whole life insurance provides a guaranteed death benefit and guaranteed cash values.