Final answer:
The two basic types of life insurance are term life insurance and whole life insurance. Term insurance covers a specific term, whereas whole life insurance offers lifetime coverage and includes a cash value component. Option a.
Step-by-step explanation:
The two basic types of life insurance policies are term life insurance and whole life insurance (also known as permanent life insurance). Term life insurance provides coverage for a specified term or period and pays out only if the insured person dies during that term. Whole life insurance, on the other hand, provides coverage for the insured's entire lifetime, as long as premiums are paid, and also includes a cash value component which can be borrowed against or used as an investment.
From the provided choices, the correct answer is (a) universal and permanent whole life insurance. Universal life is a type of permanent insurance with a cash value that can vary based on how often and how much you pay your premiums, as well as the interest rate the cash value earns. Permanent life insurance is a term broadly used to describe life insurance policies that do not expire, such as whole life and universal life.