Term life insurance provides a death benefit if the policyholder dies within a certain period, or term, such as 10 or 20 years. Because the death benefit is limited to that specific timeframe, and the policy features no cash value accounts, term life is more affordable than other permanent types of life insurance. Coverage and rates are based on pre-set criteria and may be classified into categories like "smoker," "standard," and "preferred." Group Term life insurance is a type of term life insurance coverage offered to a group by an employer, association, employer or other organization. Individual Term life, unlike group term life, the individual controls the policy and rates are based on only their individual health history.
In contrast to term insurance, Whole life insurance is designed to provide life insurance coverage, plus other “living benefits,” including guaranteed cash value accumulation as long as premiums are paid, eligibility to earn dividends, and access to cash value via loans and partial surrenders.
Universal life insurance is a type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance), which is invested to provide a cash value buildup.