Like so many things in life, the answer to which life insurance is the right one for you...depends.
First - there are two types of life insurance - "Term" and "Perm" (for permanent life insurance).
Term is the easiest to understand. You purchase a set amount of coverage ($300K, $500K, etc) for a limited time period such as 10, 20 or 30 years. As long as you keep current with the payments, the coverage is in place, but at the end of the term that's it. Coverage is over and there is no cash value left.
Perm has a lot more moving parts. It gets it's name because the coverage period for your insurance is permanent; it's for your whole life (technically age 121). Also, the coverage has a cash value component. To explain this, visualize that each month, your premium goes into a bucket. From the bottom of the bucket, a portion of the premium goes to pay for the life insurance component. The rest stays in the bucket and grows tax-deferred. This is your cash-value. From here there are lots of options depending on your needs. You can get whole life which has set payments and a guaranteed rate of return. Or you can opt for a universal life policy which allows for monthly payment flexibility, and if you can tolerate more risk, you can choose a variable universal life policy, which let's you put your cash value money into select mutual funds of your choosing. As that money grows you can access it by making a near interest-free loan to yourself. Whether you repay that loan is up to you, but realize it affects your cash value's growth rate.
Perm is more expensive than term, but has greater flexibility. Many clients choose a combination of both perm and term policies.
This is just a high-level explanation - for more, please call me at (925) 588-3888.
