What type of life insurance is best?

Before you can shop for life insurance, you should know the major types of policies that exist and how they're used. Policies come in many flavors. Here's a primer of the four main categories.

• Term life insurance is often considered the least complicated, cheapest and most recommended type of life insurance to buy. Term policies cover the insured for a specific term, or time period.
  If the insured dies before the term ends, his or her beneficiaries generally receive a lump-sum payment. If the insured outlives the term of the policy, it simply expires. By that time, if the policyholder has built up a substantial savings or he or she no longer has dependents, he or she may not need life insurance.
• Whole life insurance policies are more expensive than term policies. They provide coverage for the insured's entire life and will not expire as long as he or she keeps paying the premium.
• Universal life insurance is similar to a whole life policy, but money is set aside for investment, with the goal of earning more money for the consumer. The face value of the policy can increase or decrease with the value of the investment. Upon the insured's death, the beneficiaries may receive the face value of the policy or the face value plus the cash value of the investment account.
• Variable life insurance is similar to universal life, but it generally has more investment options, such as stocks, bonds and mutual funds. The policyholder can typically choose the investment vehicle they want to use.

Finding a life insurance policy does not need to be confusing. When armed with the right information, consumers can make the best policy decisions for their families and beneficiaries.

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