There are two main types of life insurance: Term Life Insurance and Whole Life Insurance. The information below should be helpful in determining what type is right for you.

Term Life Insurance

Advantages

• In general, when comparing an equivalent amount of coverage between term and whole life insurance plans, term insurance premiums are lower.
• Term insurance is good for covering specific needs that will eventually disappear, such as your children's college tuition, or a mortgage.

Disadvantages

• Unless you buy level premium term insurance, your insurance premiums will increase as you grow older.
• If you need your term insurance plan for a greater length of time than you initially estimated, your coverage may become very expensive.

Whole Life Insurance

Advantages

• With whole life insurance, as long as you continue to pay the required premiums when due, your policy is guaranteed to remain in force for your whole life.
• With fixed premium plans, your premiums won't increase as you get older.
• Your whole life insurance policy can accumulate a cash value that is typically (usually) free from current taxes, which you can borrow against.
• Surrender your whole life insurance policy for its cash value at any time.
• Use the policy's dividends to automatically increase the amount of life insurance you own (its face value) or receive the dividends as cash.

Disadvantages

• To buy the level of protection you need, the cost of the required premium payments may be too high.
• As your needs change over time, you may ultimately require less insurance.