Editing Life insurance (section)

== Types of Life Insurance ==
Life insurance generally falls into two categories: '''term life''' and '''permanent life'''. Each serves a unique financial purpose.

=== Term Life Insurance ===
Term life insurance offers coverage for a fixed period (e.g., 10, 20, or 30 years). If the insured dies during the term, the beneficiary receives the death benefit. If the term expires while the person is still alive, the policy ends unless renewed.

'''Pros:'''

* Lower premiums
* Simple and affordable
* Great for temporary needs

'''Cons:'''

* No cash value
* Coverage ends after the term
* It is important to note that a small percentage, between 1% and 2%, of term life insurance policies result in a payout to the beneficiary, and this occurs when the insured individual outlives the policy term.  This highlights the temporary nature of term life insurance and the fact that the policy's coverage ceases upon expiration unless renewed.

=== Permanent Life Insurance ===
Permanent life insurance offers long-term security and financial benefits beyond basic death coverage. Unlike term life insurance, which provides coverage for a specific period, permanent policies are designed to last a lifetime, as long as premiums are paid. A key feature of permanent life insurance is the accumulation of cash value. This cash value grows over time, often with guaranteed interest rates, and can be accessed through loans or withdrawals. This cash value aspect makes permanent life insurance a versatile tool for long-term financial planning, estate planning, and providing access to funds for various needs.

==== Whole Life Insurance ====

* Fixed premiums
* Guaranteed cash value
* Used for estate planning or lifelong protection

==== Universal Life Insurance ====

* Flexible premiums and death benefit
* Interest-based cash value

==== Index Universal Life (IUL) ====

* Links cash value growth to a stock market index (e.g., S&P 500)
* Has growth caps and protection floors
* Popular for combining protection and potential tax-free retirement income

'''Pros:'''

* Lifetime protection
* Builds cash value
* Can be used for loans or emergencies

'''Cons:'''

* Higher premiums
* More complex than term policies<br />