What is Life Insurance?
A life insurance policy can be purchased either as a whole life policy or as a term life policy.
Whole life coverage is a form of permanent life insurance, which means that the policy provides lifelong coverage and includes an investment component called the “cash value”. This “cash value” is tax-deferred and slow growing, meaning that while it is accumulating, you will not pay any tax on it.
Term life coverage will provide the insured with coverage for a certain time period. This type of insurance is designed to protect your dependents if you die prematurely; if you die within the term, the policy will pay out. Common terms include 10, 20, and 30 years.