No-one likes to think about death, but have you considered what would happen to your partner or children if you died? Life insurance guarantees financial protection to help your dependants cope financially in the event of your death.
Term assurance is the cheapest and simplest form of life cover. It is straightforward insurance with no investment element and it pays out a lump sum if you die within a specified period - 10 years or 25 years, for example. If you are alive at the end of the term you don't get anything back. The term can be chosen to cover the time when children are growing up and expenses are high.
Whole-of-life insurance, on the other hand, lasts throughout your life so your dependants are guaranteed a payout. Not surprisingly, it can cost substantially more than term assurance. Most whole-of-life policies are issued on a "with-profits" basis - that means you share in the profits made by the insurance company. These are usually added to the policy in the form of bonuses.
Care should be taken when considering whole-of-life policies: they can be attractive because they give you life cover and they have a surrender value at any time - but to get your hands on the surrender value you've got to cancel the policy, which means you lose the life cover.