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 specified period, typically ranging from one to thirty years, and pays a death benefit only if the insured passes away within that term. It is often more affordable and straightforward, making it a popular choice for individuals looking for temporary coverage.

Whole life insurance, on the other hand, is a type of permanent insurance that does not expire as long as premiums are paid. It includes a death benefit as well as a cash value component that accumulates over time. This type of insurance not only provides lifelong coverage but also offers the policyholder the potential to borrow against the cash value.

The other options contain variations of life insurance but do not represent the two main types. While universal life and variable life insurance are forms of permanent insurance, they are considered subcategories or variations within the broader classification of whole life. Similarly, accidental death insurance is not a primary type of life insurance but rather a form of additional coverage that pays out in specific circumstances. Thus, term life and whole life stand out as the two foundational categories of life insurance products.