Types of life insurance

Figuring out the amount of coverage, how much you want to leave to your beneficiaries and what additional coverage you might need depends on your family and financial situation. The right life insurance policy helps ensure your loved ones are taken care of after you’re gone.

Explore your coverage options to find the policy that is best suited to you and your family.

Why we like:

Compare quotes from 16 life insurance companies side by side.

• Compare multiple providers
• Calculate how much coverage you need
• Get a quote in 2 minutes

Why we like: Policygenius

Compare quotes from 16 life insurance companies side by side.

• Get the coverage amount and term that's right for you.
• Choose between term or whole life insurance.
• Easy online application process.

Go to site
More info

What are the different types of life insurance?

There are a number of different types of life insurance — which is one of the reasons it can be difficult to nail down the best policy for your needs. Here are the key features of each policy type to help you compare your options.

Term life

• What is it?

  Term life insurance offers coverage for a predetermined length of time. Terms come in varying lengths and offer a one-time death benefit payment to beneficiaries if you pass away during the term of the policy.

• How does it work?

  The policyholder chooses the term length — typically between five and 35 years — and the coverage amount. You pay a set premium to maintain coverage over the length of the term. If you live past the end of the term, you can either renew or surrender the policy.

• Is it right for me?

  Term life insurance is often considered to be the most affordable. While fairly straightforward, this type of life insurance doesn’t build cash value and premiums may be lower or higher depending on your age, health, gender and occupation.

Permanent life

• What is it?

  Permanent life insurance offers coverage for life, with the added benefit of accumulating cash value.

• How does it work?

  Permanent life insurance comes in three forms: whole, universal, and variable. Each policy type offers unique coverage options but all three build cash value and offer lifelong coverage.

• Is it right for me?

  Permanent life insurance is typically more expensive than term life insurance but can offer fixed premiums, a guaranteed death benefit and cash value accumulation that can act as a long-term investment vehicle. The earlier you apply, the better your chances of securing a lower premium.

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, depending on your provider.

• How does it work?

  Premiums are paid on a monthly, bimonthly or annually and coverage is guaranteed. You can build cash value over time and borrow against the policy’s death benefit. When you die, your beneficiaries receive a fixed death benefit.

• Is it right for me?

  As is the case for many forms of life insurance, the cost of premiums depends on the policyholder. Whole life insurance is more expensive than term life insurance but offers fixed premiums, builds cash value and may earn dividends.

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?

  While offering many of the same features as whole life insurance, including cash value accumulation and lifelong coverage, universal policies are unique in that they offer flexible premiums. You can adjust how much you pay into your policy as your finances change, and you can use the cash value to cover premiums later in life.

• Is it right for me?

  A permanent form of life insurance offers unique features but requires a more hands-on approach than term and whole life insurance. You must monitor your policy’s cash value to ensure it is enough to keep your coverage intact, and interest rates on your savings fluctuate over time.

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?

  The policyholder can select between a number of subaccounts to invest the cash value of their policy. The insurance company manages these accounts, and if profitable, you can use the money to cover premiums later.

• Is it right for me?

  Variable life insurance is best suited for those who are comfortable investing. Taking out a variable life insurance policy can be a gamble — if your investments do well, you may be able to cover the cost of premiums. But if they do poorly, your death benefit may be reduced or wiped out altogether.

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 insurance offers the policyholder the ability to invest cash value while keeping the savings component and death benefit of the policy separate. Cash value may be reduced as a result of negative returns and higher premiums may be needed to rebuild the cash value of the policy.

• Is it right for me?

  Variable universal life insurance offers flexible premiums and the potential to earn returns, but if your investments do poorly, your premiums may rise. This policy is best reserved for those who have prior investment experience.

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.

• Is it right for me?

  If you’re looking for quick, straightforward coverage without taking a medical exam, simplified issue life insurance could be a sensible choice. But premiums are expensive and policies often don’t offer much room for customization.

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?

  Joint policies come in two forms: first- and second-to-die. In a first-to-die joint policy, the policy is paid out when one spouse dies, with the death benefit supports the surviving spouse. In a second-to-die policy, the policy is paid out after both spouses have died, with the death benefit supporting a beneficiary.

• Is it right for me?

  Joint life insurance is well-suited to healthy couples who want to streamline and simplify their coverage with a single policy.

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 purchase group life insurance for their employees and retain the master contract. Employees are either automatically enrolled or must choose to opt in. Premiums are covered by the employer or are deducted directly from the employee’s monthly earnings. Coverage is guaranteed but minimal.

• Is it right for me?

  Group life insurance is a convenient way to access a policy at little to no cost, but coverage is often minimal and you could stand to lose your policy if you leave your employer. Bump up your coverage with supplemental insurance or take out an individual policy if you don’t plan on sticking with your company long term.

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 form of life insurance is typically offered when you take out a loan, such as a home loan, car loan or line of credit. Unlike term and whole life policies, the value of credit life insurance doesn’t go to your beneficiaries, but to your creditors. The value of the policy dwindles over time as the outstanding balance on your loan decreases.

• Is it right for me?

  Credit life insurance is marketed as a method of protecting your heirs from inheriting your debt, but the policy payout from a term of whole life policy is capable of providing the same coverage. Credit life insurance coverage decreases over time while premiums remain steady, so consider alternative policy options before you apply.

AD&D life 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.

• Is it right for me?

  This form of life insurance is available as both a stand alone policy or as a policy rider. As a stand alone policy, it’s far from comprehensive, but as a policy rider, it could provide added protection and peace of mind.

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.

• Is it right for me?

  The group insurance offered and paid for by employers may not be enough to cover your needs — especially if you have a large family. Consider supplemental insurance if you’re insured through your employer and plan to stick with your company.

Final expense life

• What is it?

  Also called burial insurance, final expense life insurance is designed to cover end of life medical bills and funeral expenses, typically topping out at $20,000.

• 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 open as long as you pay the premium.

• Is it right for me?

  If you already have permanent life insurance, you don’t need to worry about final expense insurance — you’re covered. Final expense life insurance is best if you don’t have a policy, but don’t want to rely on their loved ones to provide for their burial expenses.

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.

• Is it right for me?

  It may be more affordable to purchase a term or whole policy, but if you’re having trouble securing coverage elsewhere due to a pre-existing medical condition, mortgage life insurance may be a good call.

Compare life insurance companies

Sort by:

Name	Product	Issue Ages	Coverage Range	Medical Exam Required
Bestow		21 - 54 years old	$50,000 to $1,000,000	No	Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.	Go to site More Info	Compare	loading Fetching your data...
LadderLife™ Life Insurance		20 to 60 years old	$100,000 to $8,000,000	No	Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.	Go to site More Info	Compare	loading Fetching your data...
Policygenius		18 - 85 years old	$10,000 to $10,000,000+	Depends on provider and policy	Compare quotes from 16 life insurance companies side by side.	Go to site More Info	Compare	loading Fetching your data...
Haven Life		18 - 64 years old	$100,000 to $3,000,000	No	Customized term life insurance policies up to $3 million, no medical exam required.	Go to site More Info	Compare	loading Fetching your data...
Quotacy		18 - 80 years old	$50,000 to $25,000,000	Depends on provider and policy	Get a quote within minutes from more than a dozen insurers.	Go to site More Info	Compare	loading Fetching your data...
Fidelity life insurance		20 - 85 years old	$100,000 to $1,000,000	Depends on policy	Get a term or whole life insurance quote from Fidelity Life - starting as low as $15/day.	Go to site More Info	Compare	loading Fetching your data...
JRC Life Insurance		20 - 80 years old	$25,000 to $10,000,000	No	Quickly get a quote for coverage with this marketplace, which compares term & whole life insurance policies from 45+ carriers.	Go to site More Info	Compare	loading Fetching your data...
Leap Life		18 - 75 years old	$100,000 to $5,000,000	Depends on provider and policy	Apply for a simple instant-decision policy free of charge. Compare quotes from multiple A-rated carriers.	Go to site More Info	Compare	loading Fetching your data...
Health IQ		N/A	$100,000 to $50,000,000	Depends on provider and policy	Health IQ makes life insurance more affordable for the health conscious.	Go to site More Info	Compare	loading Fetching your data...
Simplified Life		18 - 80 years old	$25,000 to $10,000,000	Depends on provider and policy	Compare quotes from over 40 highly rated carriers and get coverage shortly after approval.	Go to site More Info	Compare	loading Fetching your data...
Ethos Term Life Policies		18 - 75 years old	$25,000 to $10,000,000	Medical exams not required in most cases	Term life insurance with no medical exams for $1 million of coverage or less. Online application gets you a decision in 10 minutes.	Go to site More Info	Compare	loading Fetching your data...
Navy Mutual		18 to 85 years old	$10,000 to $1,000,000	No	Affordable life insurance for active duty, reserve, and retired United States military service members. Get a free quote online.	Go to site More Info	Compare	loading Fetching your data...

Load More

Compare up to 4 providers

Clear selection

Compare

Bottom line

When perusing your life insurance options, there are a number of things to consider, including terms, rates, premiums and coverage maximums.

Dig for details when you’re choosing a policy. Review your life insurance options with multiple providers before you apply.

Frequently asked questions.

• What types of life insurance policies build cash value?

  Whole, variable, universal and variable universal life insurance policies all build cash value over the life of the policy.

• What type of life insurance policy is cheapest?

  Term life insurance is often the most affordable life insurance that you can buy independent of your employer. This is due to the fact that you can lock yourself into affordable rates when you’re young and are only paying for what you need.

• Which types of life insurance policies can be cashed in?

  The only policies that can be surrendered to access the accumulated cash value in the policy are permanent ones. However, if your term policy has a convertible option you still may be able to cash it in.

  But remember, surrendering your policy means you’ll no longer be covered, and taking out a new policy may be expensive.

Shannon Terrell

Shannon Terrell is a writer for finder.com who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies.