Before you go shopping for insurance, you should know the difference between whole life insurance and term life insurance.
Whole life policies, which can also be called "permanent" policies, build up cash value over time and usually pay dividends. Getting a policy for your whole life is an investment. As the person whose name is on the policy, you can use the cash value. Whole policies are more flexible and cost more than term policies, but they offer more options.
Term life insurance is cheaper, but it can't be changed. People buy term policies for a certain amount of time. The benefits are paid if the named insured dies before the policy ends. But there are no return premiums if the policy ends before the death of the insured person. As the insured person, you can choose to renew the policy for another set amount of time, or you can let it run out.
The difference between whole life insurance and term insurance is like the difference between buying a house and renting one. Buying a house would be like buying a whole policy. Buying a house is like putting money into something. Most of the time, the value of the house goes up. You can get a loan based on the value of your home going up. When you want to move, you sell the house and get the money you put into it back.
On the other hand, renting is like buying a term policy. You rent a house or apartment for a certain amount of time (lease). You can't use the equity as a way to get a loan. When the lease ends, you can either sign a new one or move. If you decide to leave, you won't get any of your rent back.
But you can switch from a term policy to a permanent policy without having to get a physical (similar to renting a house with the option to buy). A change in your finances could make it possible for you to buy a full policy that you couldn't afford a few years ago.
