Life insurance helps you and your family financially, and depending on the type of life insurance policy you buy, the help could be both before and after your death. Typical life insurance pays a lump sum to beneficiaries listed on the insurance policy when you die (or a few weeks after, rather, because they need the official death certificate first). However, indexed universal life insurance gives you not only a traditional death benefit, but a cash-value account linked to the stock market. The idea is that as the cash value grows, you gain an extra pool of money. However, each type of life insurance is better for different people.
News Headlines Make You Anxious
If hearing news headlines makes you anxious, particularly those headlines about the stock market falling, crashing, being halted, and so on, you may want to stick with regular life insurance that has a fixed interest rate and no dependence on the stock market. Even though the index-linked policies have protections in place to prevent you from losing your death benefit, you can lose the cash-value amount if interest rates and stocks nosedive. If you're of the "faint of heart" when it comes to investing, regular life insurance is going to be better for you.
You Want the Ability to Change Your Premium Payment as Needed
One benefit of having an index-linked policy is that the premiums are a bit more flexible. You still have to pay them, but if you miss one payment and have enough extra money in the cash-value account, the insurance company can take the premium out of the cash account. You will more than likely have to keep a minimum amount of cash in there, so don't assume that just because there's some money in there that you can automatically skip a premium payment. Anyway, if you like the idea of having this flexibility, then an indexed policy is better for you.
You Want Another Investment Vehicle for Retirement
That cash account can grow as the stock market grows, giving you a nice little nest egg. The cash-value account can function as an emergency fund once it grows large enough, letting you put your money toward other investments and payments. It's a handy feature for people who have the money but not the access to a lot of retirement fund options.
Speak with your insurance agent about these policies to get a more personalized view of which one would be best for you. And, keep in mind that your circumstances can change, and you'll want to see what the best way to handle that would be if it were to affect your ability to pay for the insurance.