What is the difference between term insurance life insurance and universal life insurance?

Term Life Insurance will protect you for a limited period of time. It is considered pure protection life insurance. You have options for 1 year renewable term, 10 years, 15, 20 and 30 years term. Some companies even offer a 40 years term, or term to age 65. Your life is covered for the length of the contract. At the end of the selected term, you have the option to terminate coverage, or convert the term policy to a permanent life insurance (whole life or universal life insurance).

Some term policies will return all premiums paid at the end of the term. You have to have the Return of Premium option on the policy in order to get all your money back.

Universal Life insurance policy is designed to stay in force for the rest of your life, and it can accumulate cash value. Universal life policies have two components: protection and investment. Premiums are higher for Universal Life, versus Term Life, due to the investment portion which accumulates cash value.

Depending where you are in your life and financial situation, term may be your best option if you want to protect your family or dependents for a determined amount of time (until children finish college); or if you want to protect your dependents for as long as you live (up to age 120 is available) then Universal Life or Whole life are your best bet.