Life insurance is a huge field, and it is easy to become overwhelmed when searching for information about policies. Life insurance is one of the most common types of insurance in the world, along with car insurance, property insurance, health insurance, and travel insurance. Basically, it is a contract between a policy holder and an insurer, who is normally an insurance company.
In a life insurance contract, the insurer agrees to pay a stipulated death benefit amount to a designated beneficiary at the time of death of the insured person. However, life insurance can also be used as a way to accumulate cash value over time. There are a wide range of common life insurance questions that are regularly asked by people before they sign a contract, including the differences between term life insurance and permanent life insurance and the potential for various polices to accumulate a cash value.

All life insurance policies fall into two major categories; protection policies and investment policies. However, a number of policies have both a protective and an investment focus, including many of the common permanent life policies on the market. The other useful way to understand the differences between various life insurance policies is whether they are temporary or permanent in nature. The division between protection and investment policies and temporary and permanent policies are linked, so it is not as confusing as many people think. For example, temporary life insurance policies are normally purely protective in their nature, and are unable to accumulate a cash value. In contrast, permanent life insurance policies can be used for both protective and investment purposes.

Some of the other common questions about life insurance include how premium levels are priced, when death benefits are paid out, and the differences between whole life insurance and universal life insurance. Both whole life and universal life policies are permanent in nature, although there are a number of differences between the two. Whole life insurance provides a cash value table for a level premium amount, and enables people to accumulate cash value over time. In contrast, universal life policies offer greater flexibility in premium payment and the potential of greater growth.