Term life insurance is designed to provide cover over a fixed period. If you have this kind of cover in place and pass away during the policy term, your beneficiaries will receive a lumps sum pay out. You have the ability to select the term over which you have the policy and commonly this can be for 5, 10, 15, 20 or 25 years with the pay-out being known as the death benefit. For the duration of the cover, the premium and the cost will remain the same.
Whole life insurance is a level of lifelong coverage where the policy will have a cash value that increases slowly. In the main, this type of cover is more complicated than term life insurance, because the premium will remain the same while a death benefit is guaranteed with the cash value increases. Some whole life policies have been known to earn annual dividends, offering the policyholder the ability to cash them, leave them, and deposit them to earn interest or use them to decrease the premium.