Now that you understand life insurance, let's take a look at two basic kinds of life insurance. Here's each of them in a nutshell:

Term Life Insurance: This coverage lasts for a "term" you choose, usually 10, 15, 20, or 30 years. During that time, your premiums are guaranteed not to increase. If you pass away during that time period, your beneficiaries get a cash death benefit. If you live longer than the term period, you have the option to continue coverage for an annual, renewable premium, which is generally much higher. You can usually convert a term policy to a permanent one without getting a new medical exam.

Permanent Life Insurance: There are two big ways that permanent is different from term. First, the policy is meant to last the rest of your life (as long as you make the required premium payments, of course). Second, part of the money you pay in is set aside in an account where it can grow cash value that you can tap into later on. There are several types of permanent life insurance, each with different advantages.

The cash benefit paid out by life insurance can protect a lot of things. If your spouse is depending on your income for retirement, it can keep those plans on track. If you've got a mortgage, it can pay off that debt so your family won't lose their home. And if you want your kids to go to college, or you want to leave money behind for them, it can do exactly that.

The other great thing about the benefit is that it's generally paid out tax-free. So when you look at the amount of coverage you want to buy, what you see is what you get. There's no guesswork about how much gets taken out in taxes.

As you can see, life insurance is very flexible. That's why it makes sense for a lot of people, even if they all have different goals.

That's why most people would benefit from having life insurance. Here are just a few examples:

• Parents who want to make sure their children are cared for
• Those with debts they don't want to pass on to loved ones
• People who want to lock in a lower insurance rate while they're young
• Homeowners who want to make sure their family can pay off the mortgage if they should die
• Families who rely on a stay-at-home parent
• Entrepreneurs who want to protect their business
• Those who want to leave a legacy for their children and grandchildren