The two primary types of life insurance policies are term life insurance and whole life insurance, each designed to meet different financial objectives and offer distinct features. Term life insurance provides coverage for a specified term, typically ranging from 10 to 30 years. It offers a death benefit to beneficiaries if the policyholder passes away during the term. Term policies are generally more affordable than whole life insurance, making them attractive for individuals seeking temporary coverage during periods of high financial responsibility, such as raising a family or paying off a mortgage.

On the other hand, whole life insurance is a permanent life insurance policy that covers the policyholder for their entire life. In addition to the death benefit, whole life insurance accumulates cash value over time, acting as a tax-advantaged savings component. Policyholders can access this cash value through loans or withdrawals during their lifetime. Whole life insurance premiums are higher than those of term life insurance but remain level throughout the policy's duration.

The key difference between the two lies in their duration and features. Term life insurance provides coverage for a specific term and does not accrue cash value, while whole life insurance is a lifelong policy with an investment component in the form of cash value. The choice between term and whole life insurance depends on individual financial goals, budget, and the desired duration of coverage. Some individuals may choose a combination of both types to address different needs at various life stages.

In a key person life insurance policy, the company or business is typically the owner of the policy, and the business itself is designated as the beneficiary. A key person life insurance policy is a type of business insurance designed to financially protect a company in the event of the death of a key employee, often someone whose skills, knowledge, or leadership is crucial to the company's success.

The company pays the premiums for the policy and, in the unfortunate event of the key person's death, receives the death benefit. This financial payout can help the company manage the economic impact of losing a key individual, covering expenses such as recruiting and training a replacement, compensating for a decline in business during the transition, or settling outstanding debts.

While the company owns the policy and is the beneficiary, the insured key person is often involved in the underwriting process, providing information and sometimes undergoing a medical examination, as their death will trigger the payout. This type of insurance is a strategic risk management tool for businesses to mitigate the potential financial repercussions associated with the loss of a key employee.