What is term life insurance?

Term life insurance is “pure” life insurance. The policyholder pays premiums regularly. If they die while the policy is in effect, their beneficiary (or beneficiaries) receives a death benefit.
It’s very straightforward, which is the selling point for people who want a simple life insurance option.
The key definition when it comes to term life is the term - how long the policy is active. Term life policies expire after a set number of years, making them good policies for anyone who expects to build wealth over time and won’t need the financial safety net life insurance provides later in life.

But the term limit also limits coverage. If you still need that financial safety net when you’re in your 60s or 70s, you’ll need to shop for a new policy (which may be prohibitively expensive).
Term life insurance is also relatively inexpensive. Because there aren't any additional fees or maintenance, it’s much more affordable than whole life.

What is whole life insurance?

Whole life insurance is a type of permanent life insurance, which stays in effect for as long as you pay the premiums. This means you never have to worry about uninsurability or losing your safety net as you get older.
Whole life is more complicated than term overall, but one definition you need to know is the cash value, which is an investment-like product coupled with the insurance policy.

Each month, a certain portion of your premium will go into a tax-deferred savings account, or the cash value of the policy. (The exact amount that goes into savings is determined by your individual policy.) The policy's cash value grows over time.
You can do many things with the cash value, including taking out a loan, drawing from it for retirement or funding the policy.

Life insurance can be an important part of your financial strategy. That's because a life insurance policy can help you ensure that your loved ones have a secure financial future after you pass away.

Not only can life insurance help cover your final expenses — it can also provide your family with a financial safety net by helping to replace your income or serving as an inheritance for a loved one. Read on to learn about some of the ways life insurance benefits may be used:

Indexed Universal Life (IUL Insurance)

Indexed universal life (often shortened to IUL) is a type of universal life insurance product that offers a death benefit coupled with a cash account that can be used to pay policy premiums or take withdrawals and loans. Indexed life usually provides a floor of 0%, but offers higher upside interest crediting based on the performance of an outside stock index such as the S&P 500 Index. Indexed life insurance is a moderately conservative interest-sensitive life insurance product.

Fixed Annuity

Fixed annuities are insurance products which protect against loss and generally offer fixed rates of return. The rates are typically based on the current interest rate environment.

As with all traditional fixed annuities, money can be withdrawn from an indexed annuity at any time. Owners may also choose to receive a payment based on the value of the policy for their lifetime.