What is life insurance? Insurance that pays out a sum of money either on the death of the insured person or after a set period. Your need for life insurance varies with your age and responsibilities. It is a very important part of financial planning. There are several reasons to purchase life insurance specially when there is a sudden death. You may want to make sure your dependents do not incur significant debt when you die. It keeps everyone in your family from struggling in hard situations and your life insurance agency will give a hand through all the process. All policies are not the same. Some give coverage for your lifetime and other cover you for a specific number of years. Some build up cash values and others do not. Some policies combine different kinds of insurance, and others let you change from one kind of insurance to another. Some policies may offer other benefits while you are still living. There are two basic types of life insurance: term insurance and permanent insurance. Before buying your life insurance make sure you feel comfortable with your life insurance agent and company. Decide the quantity of the amount you want to get for your insurance. The difference between term insurance and permanent insurance, term insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future. You may combine cash value life insurance with term insurance for the period of your greatest need for life insurance to replace income. Permanent insurance (such as universal life, variable universal life and whole life) provides long-term financial protection. These policies include both a death benefit and, in some cases, cash savings.