In general, most people know that they need to have some kind of life insurance. Life insurance is a great way to protect your family in case you die. Even though a lot of people know it's important to have life insurance, they might not know that there are many different kinds of policies out there.
One kind of life insurance is called "Whole Life Insurance." This kind of insurance works as long as you keep making the monthly premium payments. This type of life insurance is very popular because it lets you build up a cash value on the policy and doesn't have to be paid tax on. This is how it works: a portion of the premium you pay goes into an account where the policy invests the money. All of the policy's interest is put into savings, which helps the cash value grow. Once the cash value goes up to a certain point, you may have to pay the premium or be able to borrow against the cash value.
The fact that your premium will always be the same is another good thing about whole life insurance. The amount will never change, so as long as you keep paying the monthly premium, you will stay at the same amount for the whole time. If you decide to borrow money against the cash value you've earned, the only extra thing you'll have to do is pay back the loan. One bad thing about this policy is that you won't have any say over how the company invests the money you pay for your premium.
Term life insurance is a different kind of life insurance. This policy has been chosen for a certain length of time. If you died during this time period, the contract says that your family would get a lump sum payment. This type of policy usually has much lower premiums than other types, and you can't build up any cash value with it. Your premium for this kind of life insurance can change or go up every year, and in most cases, it does. It is the most expensive type of insurance, but it will protect your family completely if you die.
