Making a decision about what type of life insurance is right for you is complex. Numerous factors play a role in this decision, especially as it relates to what you hope the policy will offer. Take a look at two of the main types of life insurance people purchase today. Then, with the assistance and guidance of your independent insurance agent, determine which fits your needs the best.

Whole Life Insurance

Whole life insurance provides financial protection to those you name as beneficiaries of the policy if you die while it’s in place. It may provide additional benefits, often called living benefits, to holders as well. This may include guaranteed cash value accumulation, dividend earnings and loan options. Whole life insurance tends to be ideal in some cases, such as:

• It remains in place long term. As long as you pay premiums, your policy will not be canceled based on your health. Purchasing it sooner (rather than waiting) also keeps costs more affordable.
  
  
• It often builds cash value. You can use this for a variety of reasons, such as to make a down payment on a home or pay for your child's education.

Whole life insurance is ideal for many people who want to remain covered throughout their life. It can be an excellent addition to an estate plan as well.

Term Life Insurance

Unlike whole life insurance, term life insurance lasts for a very specific period of time. This may be for a single year or up to 20 years. You'll purchase it for the length of time you believe you need coverage. It has a guaranteed death benefit during the term, but it does not provide any cash value. Your premiums can increase at various intervals as well. It may be an option for some situations, such as:

• You only want life insurance while repaying a loan or while caring for dependents, such as your child.
  
  
• You want a more affordable life insurance policy and don't want to borrow from it.

Determining which type of policy is right for your situation means taking into consideration what you hope the plan will cover. For most, this decision depends on where your risks are. Do you want to provide your family with financial support should you die at a young age, or do you want to ensure you are leaving behind funds no matter when you die?