A couple of different life insurance terms can be confusing:
- Whole life insurance
- Term life insurance
Term life insurance is bought for a specific length of time, which depends on your age. For example, you could purchase a 10 or 20 year policy. The premiums in the case of term life insurance stay the same throughout the duration of the policy, and when the insurance expires the coverage stops.
Whole life insurance is more expensive. Some of the premium which you pay to the insurance provider is invested so that after several years some equity is built up. This can be taken out to use.
It is also possible to buy the cheaper term life insurance and to invest the difference personally. This can be advantageous as long as the individual has sufficient financial knowledge to handle their investments, and can be more economical.