There is no question that everyone should have some sort of life insurance policy. It’s deciding on the right policy that can be confusing. The two main types are term life insurance and whole life insurance. One of them has an option to use its value now, while the other pays out only upon your death. There are other differences, but those are the two most significant.
As you might have guessed, term life insurance lasts for a pre-set “term” or time limit, usually offered in increments of 10 years. So you might get a policy that lasts 10 years or you might get one that lasts 30 years, depending on your needs and what you choose. The main disadvantage to term life insurance is that once the policy term is up, you may need to choose a new one that may come at a higher rate.
Whole life insurance doesn’t expire, and you can borrow against what you have invested in it. However, you have to pay back your loan, with interest. Otherwise, the death benefit could be significantly reduced. The premium remains the same for as long as you own the policy, which can be very helpful if you happen to encounter significant health problems once you have the policy in place.
Do your research to determine how much life insurance you need, what you can afford to pay on it, and what exactly you intend to do with it.