Life Insurance catatories

Two Basic Types
There are two basic types of life insurance: permanent insurance that provides protection for life; and term insurance that provides insurance coverage for a specific number of years. Both types pay a death benefit if you should die with the policy still in force.

Whole life
is a common permanent policy that provides a guaranteed death benefit, expressed as the face amount, for premiums that are usually guaranteed to remain level regardless of age or health changes throughout your life. Whole life policies often pay dividends. These policies accumulate a cash value that may be borrowed against, used to continue coverage if premiums are missed, or withdrawn.

Universal life
is a permanent interest-sensitive policy that is more flexible and is divided into basic insurance and an investment account. You can decide how much goes into each and increase or decrease your premiums and the death benefits within some limitations. Premiums and benefits can be readjusted at specified times, depending on your insurance needs and on what choices you make in the investment side of the policy.

Term-to-100 policies
are often seen as permanent insurance but their main characteristics are similar to other term insurance policies. Most term-to-100 plans don't build cash values or pay dividends. They provide a death benefit to age 100, if the policy is kept in force, and have level premiums, regardless of changes in age or health. Basic term insurance policies are generally for a specified period, such as one, five, 10 or more years, or to a specified age. These contracts tend to have lower premiums while the life insured is young, but when renewed for an additional term period, the premiums can rise significantly. Term policies are ideal to cover large obligations over a short period when funds available for insurance are small. Most term policies can be converted to a permanent policy under certain conditions.