Term life insurance policies offer protection for a specified period of time. Policies vary between 1, 5, 10, 15, 20 or 30 years, or also until a specific age. Premiums may increase each year (annually renewable term) or remain level for a set period (level term), and the insurance is generally less expensive than permanent (cash value) life insurance.

People who need coverage for a short period of time or who need a large amount of life insurance at a very low cost. Term life insurance only provides a death benefit, the policies do not offer an opportunity to build cash values. However with the "return of premium term" you can obtain at the end of the level-premium period, the amount of the premiums paid. This is an alternative to traditional term life and permanent insurance products..

Universal life policies are more flexible. You can choose the amount of insurance and the premium to be paid with a range of potential premiums. Your premiums go to a cash value account where the money earns tax-deferred interest. Each month, policy expenses and cost of insurance are deducted from the cash value account. You can access your cash values through policy loans and withdrawals (charges may apply). A no-lapse guarantee can be offered so that coverage will continue for a specified period of time, only if the insured continues to pay the minimum guaranteed premiums. A catch-up provision allows the policy owner to catch up the guaranteed premium at any time if the policy is in force.

Index universal life insurance (IUL) is a traditional universal life insurance policy with an indexed feature. The cash value goes to an indexed account measured with an outside index like the S&P500, instead of a fixed account with traditional fixed interest rates. The maximum interest crediting rate is limited by a growth cap. As a universal life insurance product, it also offers death benefits, flexible premiums, and tax deferred accumulation of cash value.Indexed universal life products offer interest-crediting rates linked to a stock market index, with the safety of a minimum guaranteed interest rate.

Having whole life insurance means having a guaranteed death benefit and guaranteed cash values, with a cash value account with tax-deferred growth and additional interests after a specific period of time.