Lesson Summary

Term life insurance and whole life insurance are two examples of life insurance.

A term life insurance policy is so called as it lasts for only a fixed number of years depending on the policy.

A whole life insurance policy is so called as it lasts for the duration of the policy holder's life.

A premium is the name given to the amount of money a life insurance policy holder pays either regularly or as a lump sum.

The beneficiary is the name given to the person(s) who obtains the payout from a life insurance policy after the policy holder dies.
The acronym IRA stands for Individual Retirement Account.

Traditional IRA and Roth IRA are examples of IRAs.

If you withdraw money early from a Traditional IRA account then you will pay penalty and taxes.

William Roth helped create the Roth IRA in the U.S.

In the Roth IRA tax is not deferred.

In both Traditional and Roth IRA's earnings are not taxed while in an account.

A 401(K) is very similar to a Traditional IRA.

In a 401(K) tax is deferred.

Can withdraw principal after age 59.5 years of age.

There are penalties if some of the principal is not withdrawn before 70.5 years of age.

If the principal is withdrawn before 59.5 years of age it is taxed and there are penalties.