Florida Life and Health Insurance License Practice Test 2025 - Free Insurance Practice Questions and Study Guide

The two main types of life insurance are accurately identified as term life insurance and whole life insurance. Term life insurance provides coverage for a specific period or "term," typically ranging from one to thirty years. If the insured passes away during this period, the beneficiaries receive the death benefit. However, if the term expires and the insured is still alive, the coverage ends, and there is no payout. This type of insurance is often more affordable because it does not include a cash value component.

Whole life insurance, on the other hand, is a form of permanent insurance that provides coverage for the insured's entire life, as long as premiums are paid. It also accumulates cash value over time, which can be borrowed against or withdrawn. This combination of lifelong coverage and cash value accumulation makes whole life a unique investment option as well as a protective measure.

The other options include types of insurance that do not primarily focus on life coverage; accident insurance and health insurance are not considered life insurance products. Annuity products, while related to retirement and income, also do not fall under the life insurance category. Thus, the pairing of term life insurance and whole life insurance represents the foundational two categories within the life insurance framework.