Term life has no cash value. If you stop paying for it, it simply lapses. Because it has no cash value, that is, you can't just surrender it and take the money out of it, it is also the lowest priced insurance you can buy.

If term seems attractive, you need to consider the fact that at the end of the term, the premium will increase by 300% or more. Furthermore, it will keep going up every year as it will become "annual renewable" unless you convert it to something else. When you convert, your premium will be adjusted to your age at that time. Eventually, the premium will be nearly as much as the face value, and at a pre-determined age, the policy will expire altogether. Additionally, health issues in later years may limit your ability to purchase a new policy. Unless you have a reason to believe that you will not need life insurance in later years, you probably want to look at some other options.

Advantages of "Term"
Term life does have some advantages. It is cheap and yet allows you to add numerous riders such as spouse riders and child riders. Both the spouse and the children will be able to convert their portion of the rider to whole life at a later date. The conversions require no medical underwriting. Also, it is possible to combine a term rider with a universal or whole life policy, thereby taking care of your needs both now and in the future.

Waivers and Riders
Disability waivers and unemployment riders are also available with Term Life. The disability rider is very inexpensive, but if you become disabled, the company will continue to pay the cost of insurance until the last renewable date. The unemployment rider will require the company to pay your premium for 1 to 3 years if you lose your job. The unemployment rider is less common, but nearly all companies offer the disability waiver. If you are young—age 40 or less—the disability waiver is a wise choice.

Buy Term and Invest the Difference
Years ago, companies marketed term life under the slogan "buy term, invest the difference." The idea was to pay just for term life, but simultaneously set up an investment plan via an IRA, brokerage account, long term CD or other investment instrument. The concept did not work for most people because they spent the difference instead of saving it. Furthermore, paying for final expenses out of a retirement account can mean a substantial tax burden to your heirs. Even non-qualified investments can result in estate tax and capital gains taxes if an heir takes it all at once. Life insurance, on the other hand, can be used to pay inheritance and income taxes, thereby protecting much more of the estate. Like many slogans, the idea was better than the actual practice.

Whole (or Permanent) Life
Like Term Life, whole life practically defines itself. While variations exist, the basic concept is a policy with a set premium that will pay a face value at your death, regardless of how long you live. It builds cash value, so if you do decide you don’t need it in later years, you can surrender it for the value, or use that value to purchase a paid-up policy. The premiums are higher than the initial premiums on a term policy, but a whole life kept for 30 or 40 years will always be less costly in the long run than trying to annually renew a term after its initial period. A whole life policy provides life long security and protection. It has the same riders as those available on a term policy. The primary policy will usually be in force to age 120 although your premium stops at age 100.

Universal Life
A universal life insurance policy is a combination of a Term policy and a Whole life. It has two independent components, the life insurance itself and a savings or accumulation portion. Your premium goes first into the savings portion, from which the cost of insurance and fees are deducted. A universal is sensitive to interest rates, and thus could have adjustments to the premium as you get older; however, a properly funded universal will build the cash value more quickly than the cost of insurance can rise, meaning you can have it set up so that no matter how old you are, the cash value continues to grow. Since this type of policy is also flexible, you can adjust both the face value and your premium to fit your budget over time. You can also take funds out of the saving in the event of an emergency without having to take a loan. The premiums are higher than Term, but often much cheaper than Whole Life.

No (or Low) Load
Whole life is almost as inexpensive as universal for people in their 20s and early 30s. If you wait until your 50s or older, insurance will be more expensive regardless of the type you purchase. In an attempt to reduce premiums, some people look for a "no load" or "low load" policy.  A "no load" policy is simply a policy that does not include the cost of agent commissions and other initial policy fees. Many mail order policies—particularly graded benefit policies are no-load. Other no-load policies require that you pay the agent directly according to a table provided by the company. One advantage of a no-load policy is that your cash value may begin building more quickly because the usual fees are not applied.

Joint Life
Another policy that saves cost but is more difficult to find is the joint life policy. In this type, two or more people are insured on one policy. You have to decide whether you want a first to die or second (last) to die (also known as “survivor”) option. The “first to die” assumes that if one insured person dies, the beneficiary will need the money to live on, pay debts or operate a business. In second to die, the face value is paid when the second or last insured person dies. Thus, the survivor of the first person who died would be assumed to have other insurance or independent funds to pay the expenses of the first. When the last person dies, the beneficiary receives the funds to pay estate taxes, final expenses or other bills.

Company Ratings
You can check the history and ratings of the companies of your choice at A.M. Best and Standard & Poor's. Insurance Information Institute is another source of valuable information. Technical ratings, however, should not be your first consideration. Listen to your friends and also check with the Better Business Bureau to see if any unsatisfied complaints are outstanding against a particular company. Also, pay attention to your agent. The best company in the world can appear inefficient if you cannot communicate with your agent or get questions answered quickly.