Life insurance can seem complicated to many people. You hear about term, whole life, variable annuity and much more. The two most common are term life and whole life insurance. The vast majority of people have one of these two types.
So what is the difference between term and whole life insurance? Term is a policy that you buy for a set period of time and it costs a fixed amount each year and if you die in that contract term then your beneficiaries get paid out the insurance face value. Whole life insurance has the same insurance aspect as term life, but it has an additional investment portion as well. As the name suggests, whole life is not set for a term, but instead stays in force as long as you live.