Which of the following are the two basic types of life insurance?

The two fundamental types of life insurance are often categorized into temporary coverage and permanent coverage. This classification helps consumers to understand the basic functionality and duration of the insurance contracts.

Term life insurance is the temporary form of coverage, providing life insurance protection for a specified period, such as 10, 20, or 30 years. If the insured individual passes away during this term, the beneficiaries receive the death benefit. However, if the term expires while the insured is still alive, the coverage ends, and no benefit is payable.

Whole life insurance, on the other hand, falls under the category of permanent life insurance. It provides lifelong coverage as long as the premiums are paid, and it also builds a cash value over time, which can be accessed by the policyholder.

The classification chosen highlights the contrast between the temporary nature of term insurance and the lifetime coverage provided by whole life insurance. This understanding aids individuals in selecting the appropriate type of insurance based on their specific needs, financial goals, and whether they prefer a policy that accumulates cash value or one that simply provides coverage for a fixed period.