What are the two main types of life insurance?

The two main types of life insurance are term life insurance and whole life insurance. Term life insurance provides coverage for a specific period, known as the term, and pays a death benefit if the insured passes away during that term. It is generally more affordable and is often chosen for its simplicity and straightforward nature. On the other hand, whole life insurance is a type of permanent life insurance that not only provides a death benefit but also includes a cash value component that grows over time. This cash value can be accessed by the policyholder during their lifetime, making whole life insurance a more versatile financial product.

Together, these two types of life insurance represent the foundational categories in the life insurance market, as term focuses on providing pure protection for a set duration, while whole life offers both protection and a savings component, contributing to their classification as the primary types of life insurance. The other options mentioned include types of insurance that fall outside the basic categories of life insurance, focusing instead on disability or health-related coverages, which are not classified as life insurance.