A life insurance policy, to put it simply, is a contract entered into between the policy holder and the insurance company. Under the terms of the policy, the policy holder insures his or her life by paying out a certain sum of money either as a one-time premium or as a series of premiums over a specified period. In return, upon the insured’s death, the insurance company agrees to pay his/her beneficiaries a specified amount of money. Life insurance is a risk management tool that is considered by many to be an important aspect of planning one’s finances.  While getting a life cover requires various formalities, some life insurance with no medical exam provides great convenience to users who seek coverage without a lot of paper work.

Difference between permanent life insurance and term life insurance
There are two kinds of life insurance available in the USA. These are whole life insurance and term life insurance. Under permanent life insurance policies, you are insured for as long as you pay the premiums on your policy. In some types of whole life insurance policies, a particular cash value may also accumulate which can even be used a security against loans.

As the name implies, under term life insurance policies, you pay the premiums for a pre-specified period and if the insured passes away in that period, his or her beneficiaries receive a certain amount as death benefits.

Whole and universal life insurance policies
Whole life insurance policies and universal life insurance policies are two categories of permanent life insurance. Under whole life insurance policies, the premium amount is fixed for life. Under universal life insurance policy, it is possible for the policy holder to update the terms of the policy and change the premium payable and death benefits at intervals.

Pros and cons of whole life insurance
The benefits of whole life insurance are that the premiums are fixed, so you can plan your finances keeping this in mind. Another advantage is the accumulated cash value that can be drawn upon. On the flip side to whole life insurance policies is that for the amount paid yearly as premiums the returns are relatively less. Also, a significant portion of your money goes towards various fees and commissions.