Term Insurance - Term life insurance provides protection for a specific period of time. If the death of the insured person occurs within the time limits of the policy, the death benefit will be payed to the beneficiary.  No benefits are paid if the insured person is still alive at the end of the covered term.

Term insurance does not generate cash values.  For this reason, term insurance is one of the simplest types of life insurance policies available today and is usually the least expensive means of protection.

Permanent Life Insurance - Unlike term insurance, permanent life insurance has no specified term, subject to policy conditions. A permanent life policy calls for premiums to be paid for as long as the insured lives.

If the insured dies, the death benefit is payable (subject to policy terms). If the policy is surrendered before the insured dies, the cash value is payable (minus any outstanding loans). Loans may be made from the insurance company against the cash value of the policy at a rate guaranteed in the policy as security. The maximum loan rate guaranteed in the policy may be much lower than that available from a bank.

Regardless of where the loan is secured, if the insured dies prior to the loan being repaid, the amount of the loan and any interest due must be repaid from the death-benefit amount.