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, such as 10, 20, or 30 years, and pays a death benefit only if the insured dies during that term. This type of insurance is generally more affordable and is often chosen for its simplicity and the ability to secure coverage for a limited time when financial responsibilities, like those related to children or a mortgage, may be a concern.

Whole life insurance, on the other hand, is a type of permanent life insurance that offers coverage for the entire lifetime of the insured, as long as the premiums are paid. It also includes a cash value component that grows over time, allowing the policyholder to borrow against it or to receive it upon cancellation of the policy. This feature provides additional financial planning opportunities and security throughout one's life.

While the other choices do include types of life insurance, they either describe less common or more specialized forms of insurance rather than the fundamental categories. For instance, universal life insurance is a variation of whole life that offers more flexibility in premium payments and death benefits, while accidental death insurance is a type of supplemental policy designed to pay out only for deaths caused by accidents, not a primary life