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Compare every type of life insurance policy

Find which of the 13 types of life insurance policies is ideal for you.

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Each of the 13 different life insurance policies is tailored to help with different needs in your life, from paying off major expenses like a mortgage or investing to build wealth for loved ones. See the key features and pros and cons for each policy to help you find the right option.

Compare major life insurance policies side by side

FeatureTerm lifeWhole lifeUniversal lifeVariable lifeVariable universal
Coverage for a set period of time
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Lifelong coverage
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Guaranteed death benefit
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Fixed premiums
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Flexible premiums
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Flexible death benefits and coverage amounts
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Builds cash value
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Cash value linked to investments
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Fixed interest rate
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Variable interest rate
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Tax-free withdrawals and loans
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Term life

What is it?

Term life insurance offers coverage for a set period of time and comes in varying term lengths. It offers a one-time death benefit paid to beneficiaries if you die during that term.

How does it work?

You choose the coverage amount and term length like 10 or 20 years, and then you pay a set premium during your term. If you outlive the term, you may renew or surrender the policy.

Pros

  • It’s the simplest and cheapest policy.

Cons

  • If you outlive your policy but need insurance, you have to buy another policy — and pay higher rates.

Is it right for me?

Term life insurance is the most affordable type of policy, and the best choice for most people who have temporary needs to cover — like a mortgage, student loan debt or college tuition.

Term life insurance guide

Whole life

What is it?

Whole life insurance offers fixed premiums, lifelong coverage and cash value accumulation. It also has the potential to earn dividends, if you’re with a mutual life insurance company.

How does it work?

As you pay your premium, part of your money is invested with a fixed interest rate from your insurer. Once you’ve built enough cash, you can take out loans from your policy, but the death benefit lowers by your loan amount.

Pros

  • It offers lifelong protection and becomes a cash asset over time. It also has predictable premiums, so you know exactly how much you’ll pay each month.

Cons

  • It’s significantly more expensive than term life insurance.

Is it right for me?

If you have lifelong financial responsibilities or will use your policy for estate planning, a whole life policy might suit you. But it can cost six to ten times more than term life insurance.

Whole life insurance guide

Ask an expert: What’s the best way to decide between a term and whole policy?

Anthony Martin

Anthony Martin
CEO & Founder of Choice Mutual

Choosing between term and whole life depends on why you want life insurance. It’s critical to ask the question: “What is the money going to be used for?” There are many types of life insurance, and they all work differently. For that reason, it’s important to select the policy that’s best suited to achieve the planned objective.

For example, if you want to cover a temporary liability, such as a mortgage or other debt or income replacement, term insurance is by far the best type. However, if you have a permanent objective, such as final expenses or estate planning, a permanent policy is a better fit.
In short, if your need is temporary, go term. If your need is permanent, buy whole life.

Universal life

What is it?

Like whole life insurance, universal life offers lifelong coverage and cash value accumulation with a unique feature: flexible premiums.

How does it work?

This policy offers similar features to whole life like its cash growth and lifelong coverage. But you can adjust how much you pay as your finances change, and you can use the cash value to pay your premiums.

Pros

  • You have the freedom to adjust your policy’s premium, coverage and death benefit amount.

Cons

  • Your insurer will cap your cash value returns, so double-check the “participation rate” before signing up.

Is it right for me?

Universal life insurance requires a more hands-on approach than whole life since the return on investments can fluctuate. It works best for seasoned investors with a high risk tolerance.

Universal life insurance guide

Variable life

What is it?

Variable life insurance is a type of permanent policy that offers policyholders the opportunity to place their accumulated cash value into a number of smaller investment accounts.

How does it work?

You can choose between a number of subaccounts to invest the cash value of your policy. The insurance company manages these accounts, and you can use the cash value to cover premiums later.

Pros

  • Your insurer will offer a portfolio of accounts for you to select your investments.

Cons

  • Your returns aren’t guaranteed because you’re investing in the market, and you’ll need to be more hands-on.

Is it right for me?

Variable policies suit experienced investors comfortable with extra risk. If the investments do well, your cash growth can cover premiums, but poor returns could lower or wipe out your death benefit.

Variable life insurance guide

Variable universal life

What is it?

Variable universal life insurance is a form of permanent life insurance that offers flexible premiums and the investment of accumulated cash value.

How does it work?

Variable universal life lets you invest while keeping your policy’s savings and death benefit separate. But the cash value may get lowered by negative growth, and you can pay higher premiums to rebuild cash value.

Pros

  • Along with flexible premiums, this hybrid policy gives you the ability to invest your cash value in the investments of your choice.

Cons

  • If those investments do poorly, your premiums might rise. You’ll need to be comfortable with that, and have a high risk tolerance.

Is it right for me?

Variable universal life insurance offers high earnings potential, but your premiums may rise if your investments don’t do well. Consider it if you’re an experienced investor comfortable with risky investments.
Variable universal life insurance guide

Simplified issue life

What is it?

Simplified life insurance is a no-medical-exam policy that offers both term and permanent policies for coverage at a higher premium.

How does it work?

Applicants answer a medical questionnaire instead of undergoing a medical exam, but approval isn’t guaranteed. Premiums tend to be expensive and coverage is limited.

Pros

  • There’s no medical exam, and policies can be issued within hours or days (rather than weeks).

Cons

  • It’s very expensive, and coverage is limited to small amounts.

Is it right for me?

If you need coverage right now or want to avoid taking a medical exam, simplified issue life insurance is a good choice. But premiums are expensive and policies often don’t offer much room for customization.

Simplified life insurance guide

Joint life

What is it?

Joint life insurance is a single policy that covers two people, available as either a permanent or term policy.

How does it work?

With first-to-die joint life insurance, the surviving spouse gets the death benefit when the first spouse dies. In a second-to-die policy, the benefit gets paid after both spouses die, often used for charitable donations.

Pros

  • It’s a convenient way to cover two people under one policy, and you can choose the condition that suits you: first-to-die or second-to-die.

Cons

  • You may pay higher premiums if one partner is in poor health. Plus, in first-to-die plans, the surviving spouse will be left uninsured.

Is it right for me?

Joint life insurance is well-suited to healthy couples wanting to simplify coverage with a single policy. If one spouse has a pre-existing health condition or complex medical history, the couple may want separate policies.

Joint issue life insurance guide

Group life

What is it?

Group life insurance is a form of term life insurance coverage provided by an employer at little to no cost for employees.

How does it work?

Employers buy group p0licies under a master contract and either can enroll employees automatically or let them opt in. The employer may cover the premium entirely or deduct it from an employee’s earnings.

Pros

  • It’s cheap or free, and you can get coverage even if you have a health condition.

Cons

  • The coverage is limited, and it’s almost never portable. If you leave your job, you’ll need to explore other insurance options.

Is it right for me?

A group policy can help you get coverage at little to no cost, but the coverage may not cover all your financial needs. You might supplement your employer’s insurance with an individual policy to ensure long-term coverage.

Group life insurance guide

Credit life

What is it?

Credit life insurance pays off your outstanding debts when you pass away, with the value of the policy going directly to your creditors.

How does it work?

This policy may be offered when you take out a home or car loan or line of credit, but the death benefit goes to your creditors. The value of the policy also dwindles over time as your loan balance decreases.

Pros

  • It takes care of your outstanding debts when you die.

Cons

  • Your beneficiaries won’t get the proceeds from your policy.

Is it right for me?

Credit life insurance is marketed as protection from loved ones inheriting your debt. But a term or whole life policy can pay for the same debts and more, and your coverage won’t decrease over time.

AD&D insurance

What is it?

Accidental death and dismemberment (AD&D), is a limited form of life insurance that covers you in the event of an accident.

How does it work?

Should you be involved in a fatal accident, this policy will pay out to its designated beneficiaries. If you’re injured and lose a body part or the ability to see, hear, or speak, the policy will pay out a portion of the full benefit.

Pros

  • Accidents happen, so this policy offers peace of mind – and money if you’re injured in one.

Cons

  • Depending on your injury, it may only pay out a portion of the benefit. Plus, each insurer has its own set of exclusions, so read the fine print carefully.

Is it right for me?

This policy type offers comprehensive coverage as a standalone policy. You also can buy it as a rider to your standard life insurance policy if you simply want a little extra financial protection.

Accidental death & dismemberment insurance guide

Supplemental life

What is it?

Supplemental life insurance is a form of additional insurance you can purchase to bump up existing coverage through an employer.

How does it work?

You can opt to purchase supplemental insurance by having premiums deducted from your paycheck. There’s typically no medical exam but if you leave your job or retire, you’ll likely lose your coverage.

Pros

  • There’s no medical exam, and you can usually have the premiums deducted from your paycheck – which makes it easy to stay on top of your payments.

Cons

  • Like group life insurance, it’s tied to your place of employment.

Is it right for me?

Consider supplemental insurance if you have low coverage through your employer and plan to stay with your company for several years.

Supplemental life insurance guide

Final expense life

What is it?

Also called burial insurance, final expense life insurance covers end-of-life medical bills and funeral costs, typically topping out at $20,000. However, your beneficiaries can use the payout however they want.

How does it work?

Final expense insurance often doesn’t require a medical exam. Instead, applicants are asked to answer a medical questionnaire. The policy is active as long as you pay the premium.

Pros

  • Gives your survivors money to pay for your funeral, burial and final medical expenses.
  • Open to seniors who have a hard time finding standard life insurance.

Cons

  • The coverage is usually limited to $50,000 or less, with most policies between $10,000 to $20,000.

Is it right for me?

A final expense policy works best for seniors without much in savings who don’t want to burden loved ones with end-of-life costs. If you have other life insurance, you should have plenty for final expenses.

Final expense insurance guide

Mortgage life

What is it?

Mortgage life insurance pays off the remainder of your mortgage after you die.

How does it work?

After purchasing a home, your lender may offer you mortgage life insurance. Approval rates are high but premiums are expensive and policies are non-transferable, so you’ll lose your coverage if you move.

Pros

  • It’s ideal for homeowners who have a pre-existing medical condition that disqualifies them for standard life insurance.

Cons

  • The premiums are high and policies are non-transferable.
  • The payout goes to your lender, not your family, and only pays off your mortgage.

Is it right for me?

A simple term life policy is the more flexible option. But if you can’t get coverage due to a preexisting medical condition, mortgage life insurance is an alternative.

Mortgage life insurance guide

Compare top life insurance companies

Compare top-rated life insurers by coverage limits and term lengths, then get a quote from your top picks to find your best option.

Name Product Issue age Minimum Coverage Maximum Coverage Term Lengths Medical Exam Required
Sproutt
18 - 100 years old
$50,000
$10,000,000
5, 10, 15, 20, 25 and 30 years
No
This life insurance broker combines technology and the human touch to match you with a policy tailored to your needs.
Ladder
20 - 60 years old
$100,000
$8,000,000
10, 15, 20, 25 or 30 years
Depends on policy
Term life insurance with no policy fees and a simple application process that can get you approved for coverage instantly.
Fabric
21 - 60 years old
$100,000
$5,000,000
10, 15, or 20 years
Depends on policy
Get affordable term life insurance with accelerated underwriting or no-exam coverage up to $1,000,000. Available in all states except CA, NY and MT.
Policygenius
18 - 85 years old
$50,000
$10,000,000
10, 15, 20, 25, 30 years
Depends on provider and policy
Compare affordable quotes from 12+ A-rated life insurance companies side-by-side.
Bestow
21 - 54 years old
$50,000
$1,000,000
10 or 20 years
No
Affordable 10- and 20-year term life insurance policies with instant quotes and no medical exams.
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How to choose a life insurance policy

The best life insurance policy for you comes down to your individual needs and reasons for getting coverage, including factors like:

  • Paying off financial responsibilities. If you only have financial dependents or debt for a set time, term life insurance may be a good fit.
  • Using life insurance as a cash asset. You can look into a permanent life insurance policy that builds cash value — like whole, universal or variable life.
  • Opting out of the medical exam. If you’d rather not take a medical exam or have serious health problems that disqualify you from coverage, you can opt for a no-exam policy.
  • Using life insurance to cover funeral costs. A final expense policy can ensure your loved ones aren’t burdened with your funeral, burial and end-of-life expenses.
  • Buying a policy for two people. Explore first-to-die or second-to-die life insurance, joint policies that protect two people — typically spouses.
  • Getting insured through work. Compare your employer’s group policy with other policies. You may want extra coverage from a supplemental policy.

Key life insurance policy terms

These are some of the terms you might come across when you’re researching life insurance policies:

  • Beneficiary. The person, people or organizations that will receive the death benefit payout when you die.
  • Cash value. A tax-deferred savings account attached to all permanent policies that earns interest over time.
  • Death benefit. The amount of money paid to your beneficiaries when you die. This is the same as the face value of the policy minus cash withdrawals that haven’t been repaid.
  • Face value. Also called the coverage amount, this value is the amount paid to loved ones. If you buy $250,000 in coverage, your beneficiaries will get $250,000 when you die.
  • Premium. The fee you pay to keep your policy in force.
  • Term. The period of time your policy is active — like 10, 20 or 30 years.

How are life insurance policies underwritten?

Underwriting is how your insurer determines your risk level – and how much you pay for coverage. These three types of underwriting could affect you:

  • Fully underwritten policies require a medical exam and comprehensive health questionnaire, giving a complete picture of your health. These policies often offer cheap premiums and high coverage.
  • Simplified issue policies skip the medical exam in favor of the health questionnaire, but you might be turned down. You may find higher rates and lower coverage than fully underwritten policies.
  • Guaranteed issue policies offer guaranteed approval, forgoing the exam and health questionnaire. But these are the most expensive policies while giving low coverage.
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Bottom line

The best type of life insurance policy for you is the one that suits your financial situation, whether your needs are temporary or permanent with cash value built through low- to high-risk investments.

Once you’ve picked a policy type, compare life insurance companies to ensure you’re getting a good deal.

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