Types of Life Insurance

Term:

You purchase a policy for a specified period of time (term) and pay a given premium. After the term, you renew your policy with an adjusted premium appropriate premium, depending upon your health and age. If you miss a payment, it may automatically be cancelled. Your policy is paid out only upon death within duration of the term. The policies specified period of time can range from annual to 5, 10, 15, 20, or 30 year terms. 

Permanent (Cash-Value):

This life insurance generally has a "level" premium: it remains constant throughout the duration of the policy and usually thereafter as well. There are several different types of permanent insurance with different traits. 

Ordinary or whole:

Your premiums usually remain stable and must be paid periodically during the policy's duration. Much like term, you have a pre-determined death benefit; however, your premiums are invested on behalf of the policy, providing a guaranteed cash build-up. Later, this cash value may then be applied towards the premium itself (in effect paying for itself). You can also use the cash value as collateral and borrow it (i.e. borrowing against a house mortgage).

Universal or Adjustable:

Basically, you will have cheaper premiums than you would with ordinary/whole life insurance and still keep most of the same benefits; however, the cash value build-up is not guaranteed and depends heavily on your invested premiums' performance. Bottom line: cheaper rates but less certainty about any extra cash.