When deciding on which type of life insurance to purchase, one should first look at his or her needs. For most people, the needs are basic, for example, a large mortgage, protecting family, and/or other debts. In this case, the best form of life insurance is term life insurance.
Term life insurance simply works in this way. If you buy a policy that covers you for a specified amount of time, such as 20 years for example, after that 20-year period is over, the policy expires. This type of insurance gives you the most value for your money. The reasoning behind this concept is that as we get older our needs for life insurance disappears.
There are other types of life insurance, such as whole life insurance and universal life insurance. These types of insurance are of a permanent nature and are often used for estate tax planning purposes. Thus, when choosing your life insurance a careful examination of needs is required.