Definitely a good thing to set up - especially if you don't have cash on hand that would (God forbid) cover funeral expenses, which can easily run to $10k. Ideally you should get a large enough amount to help cover the loss of the person's income, at least for a year or two.
"Term life" means you have the policy only for a fixed term, and if the insured person survives that period, the policy just expires. This is good for addressing long-term but finite obligations like a mortgage or a minor child's college education. With a "whole-life" policy, you pay into it forever at a fixed rate, but you are guaranteed a certain minimum cash payout at time of death even if you live to 120. So the $ you pay for a term life policy is "wasted" in one sense, but the benefit is that you get a much larger payout per policy dollar -- IF you get the payout. It's true insurance, not an investment vehicle. Conversely, whole-life usually isn't the best return on your money as investment vehicles go, but some people like it for simplicity I guess.
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"Term life" means you have the policy only for a fixed term, and if the insured person survives that period, the policy just expires. This is good for addressing long-term but finite obligations like a mortgage or a minor child's college education. With a "whole-life" policy, you pay into it forever at a fixed rate, but you are guaranteed a certain minimum cash payout at time of death even if you live to 120. So the $ you pay for a term life policy is "wasted" in one sense, but the benefit is that you get a much larger payout per policy dollar -- IF you get the payout. It's true insurance, not an investment vehicle. Conversely, whole-life usually isn't the best return on your money as investment vehicles go, but some people like it for simplicity I guess.
*hugs*