A term life insurance policy is one with a set duration limit on the coverage period. Once the policy is expired, it is up to your clients to decide whether to renew the term life insurance policy or to let the coverage end. As the name implies, a term insurance policy is good for a specific period of time; that can be one year, 10 years, 20 years or even up to 30 years.

Whole life insurance refers to a policy that provides lifetime protection by paying a lump sum death benefit. Whole life policies differ from term insurance in that they have a savings component with earnings accruing, referred to as cash value. In essence, whole life policies, a type of permanent insurance, combine life coverage with an investment fund.

Universal life is a type of permanent insurance policy that combines term insurance with a money market-type investment that pays a market rate of return. Unlike whole life insurance, universal life allows the cash value of investments to grow at a variable rate that is adjusted monthly. Oftentimes, the death benefit, savings element and premiums can be reviewed and altered as your clients’ circumstances change.