Life Insurance There are two basic types of life insurance. Term insurance is pure insurance that is purchased for a specified but limited period of time. When the term expires, coverage ends. It tends to be more affordable, especially for younger individuals. Permanent (whole life) insurance also offers a death benefit, but the insurance remains in force for the rest of policy owner’s lifetime, as long as premiums are paid. In addition, a portion of the premiums goes into a cash-value account that accumulates on a tax-deferred basis. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable. As withmost financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Any guarantees are contingent on the financial strength and claims-paying ability of the issuing insurance company.