When thinking about purchasing life insurance it can be very overwhelming. There are so many terms and details that are hard to make since of. Life insurance is a great way to protect your future and you should look at a few basics to help you understand.

Why do people buy life insurance? They buy life insurance for the pure fact of leaving family or a business with plenty of money to manage life without them. People want to leave this earth knowing there assets are protected. If you have no family, business or charity you wish to take care of then you should not invest.

The most popular of them all is Term Life Insurance. Term is simple and affordable to most budgets. Term Life is buying Life Insurance for only a specified length of time. Terms can be 10,20 or 30. If you out live your term the policy pays nothing.

There are pros and cons to a term life plan. One disadvantage is that once your term is up you lose the policy. So if you out live the term nobody gets anything once you die. The good thing is if you get ill during the term premium and policy do not change for the life of the term.

Another kind of policy is Whole Life insurance. Whole life is just as it sounds. It is insurance that will cover you for your whole life. So as long as you keep up with the premium you will always be guarnteed your dependents will get something.

One advantage to purchasing a Whole Life policy is that it earns a Cash Value. The Cash Value is the amount you would be paid if you should cancel your policy before your death. Some confuse this with the Face Value. Face Value is the amount it will pay your dependents if you keep the policy.

There is also universal and this insurance is for the more seasoned shopper. It combines investment and death benefit. You invest into money market, stocks and bonds which will contribute to your death benefit. However no matter who well your investments go you will be guaranteed a minimum amount to pay out at the time of death.

Last you have a variable. Variable works just like universal only the insurance company guarantees nothing. It is all based on your investments. Many people opt for a combination of these kinds of policies. They may have a Term policy as well as a Universal Policy.