What Are The Two Basic Types Of Life Insurance Policies? 
The two basic types of life insurance are permanent -LRB- whole life -RRB- and term life . Whole life insurance is designed to provide a death benefit from now until your last day . These policies grow cash value over time that can serve as an additional nest egg after retirement . Term life policies are coverages for a specific period of time . Many working adults use term life to protect their lives while their children are young to ensure they will be properly cared for if at least one parent were to pass away . Each type of policy has a few variations . For example universal life , variable life and final expense are all forms of whole life insurance . Income protection and mortgage protection are types of term insurance . Even though they fall under the two basic types of life insurance , they can all be used for different reasons depending on the consumer 's need . 