Life insurance is a contract between you and an insurance company that provides a financial benefit to your beneficiaries in the event of your death.

Term Life Insurance: Offers coverage for a specific period, such as 10, 20, or 30 years. It’s more affordable but doesn’t build cash value.

Whole Life Insurance: Provides lifelong coverage and includes a savings component, allowing you to accumulate cash value over time

The coverage amount depends on factors such as your income, debts, future financial obligations (like college tuition), and your family’s needs. Many experts recommend coverage that is 7-10 times your annual salary.

You can borrow against the cash value of a whole life insurance policy, but the loan will reduce the death benefit until it’s repaid. Term life insurance does not have a cash value, so you can’t borrow against it.

Some policies require a medical exam, especially for larger coverage amounts. However, there are no-exam policies available that offer coverage based on a health questionnaire.