 TITLE: Should I Buy Life Insurance or Stocks? CONTENT: How Does a Life Insurance Policy Work?\n--------------------------------------\nWith a life insurance policy, you make regular premium payments to an insurer to keep it active. Should you pass away while covered, your beneficiaries will then receive a payout called a death benefit. Policy terms and levels of coverage vary, but you may be able to add extra protections and flexibility with optional life insurance riders.\nLife insurance is structured in the following ways:\n*   **Term life insurance**: Coverage lasts for a predetermined amount of time, typically anywhere from one year to 30 years. Premiums usually stay the same for the life of the policy. Your coverage expires when your term ends, though you may choose to renew your policy (usually at a much higher cost). There is no cash value other than the death benefit your survivors receive when you pass away.\n*   **Whole life insurance**: This type of _permanent life insurance_ lasts for your entire life, as long as you keep up premium payments. Premiums tend to be higher with this type of policy, but it will accumulate a cash value in an account that works similarly to a savings account. It can provide financial peace of mind—and a source of guaranteed income in retirement.\n*   **Universal life insurance**: Another form of permanent life insurance, universal coverage also accumulates cash value. But unlike whole life insurance, which has fixed premiums, a universal policy offers more flexibility. Your premium amount, payment amount and death benefit can all be adjusted during your coverage period.\nWith permanent life insurance, you can usually access the accumulated cash value of your life insurance policy via a loan, or by withdrawing funds and reducing your death benefit. Alternatively, you could surrender your policy and receive a lump sum of cash, though you may be charged a fee depending on how long you've had the policy. Either way, your cash value will grow on a tax-deferred basis: You won't be taxed on any gains until you withdraw funds. END