Updated: July 14, 2025
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Term life offers affordable, time-limited coverage ideal for income replacement. Permanent policies like whole life and universal life provide lifetime protection and build cash value, but cost much more.
Specialty policies, including final expense, AD&D and joint life insurance, offer targeted coverage for funeral costs, accidental injury or death or two-person households.
The best type of life insurance depends on your age, health, income and whether you need short-term coverage, lifelong protection or estate planning support.
Life insurance isn’t limited to just term or whole policies. Multiple types are designed for different needs, from short-term coverage to lifelong protection to end-of-life costs. Some policies offer affordability with no frills, while others build cash value or provide flexible benefits. When comparing options, it helps to start with a clear breakdown of the major categories and how they work.
Type | Description |
|---|---|
Term Life Insurance | Covers you for a set number of years, like 10, 20 or 30. It’s often the lowest-cost option and pays a benefit only if you pass away during the term. |
Whole Life Insurance | A permanent policy with fixed premiums, guaranteed death benefit and cash value that grows over time. It’s stable but usually more expensive. |
Universal Life Insurance | Also permanent, but with flexible premiums and adjustable coverage. Variants like indexed and variable UL link your policy's value to market performance. |
No-Medical-Exam Life Insurance | Includes simplified and guaranteed issue policies. These skip the medical exam but often cost more and offer lower coverage limits. |
Group Life Insurance | Offered through employers or associations. Coverage is often limited, and policies may not be portable if you leave your job. |
Final Expense Insurance | Designed to cover funeral and burial costs. Small coverage amounts, typically $5,000 to $25,000, are offered with easy approval for seniors. |
Accidental Death and Dismemberment (AD&D) | Pays a benefit only if death or injury occurs due to an accident. It’s usually a supplemental policy with limited coverage. |
Joint Life Insurance | Covers two people on one policy. Often used by couples planning around shared financial responsibilities or estate planning. |
The right policy for you will depend on your age, budget, health and financial goals. Below, we break down each type in detail to help you make the right call.
Term life insurance provides coverage for a specific period, typically 10, 20 or 30 years. If you pass away during the term, your beneficiaries receive a death benefit. If you outlive the policy, the coverage ends with no payout. Term life is straightforward and often the most affordable type of life insurance, making it a popular choice for people looking to protect dependents during their working years.
There are three main types of term life insurance, each structured differently to meet various financial needs.
A level term policy offers fixed premiums and a constant death benefit throughout the term. You pay the same amount each year, and your beneficiaries receive a guaranteed payout if you die while the policy is active. It’s simple, predictable, and widely used for income replacement or family protection.
A yearly renewable term (YRT) policy renews annually without requiring a new medical exam. It starts with lower premiums, but the cost increases each year as you age. While it offers short-term flexibility, the rising cost can make it expensive over time. YRT is often used for stopgap coverage between longer-term policies.
Decreasing term life insurance starts with a set death benefit that gradually reduces over the policy term, while premiums remain level. It’s commonly used to cover debts that shrink over time, like mortgages or loans.
The average cost of term life insurance changes based on your age when you apply. Review the premium table below to see the average monthly rates by age, term, coverage level and gender. Actual rates may be higher if you have pre-existing conditions or smoke, as higher-risk applicants pay more.
| 30-Year-Old | $14 | $20 | $35 |
| 40-Year-Old | $18 | $29 | $53 |
| 50-Year-Old | $37 | $65 | $117 |
| 60-Year-Old | $76 | $141 | $271 |
| 70-Year-Old | $204 | $410 | $719 |
Based on our research and common customer questions, here are the most important things to know about term life insurance.
Term life insurance is an affordable way to get coverage. It often comes in terms of 10, 15, 20 or 30 years, allowing you to maintain coverage until you no longer need it. It is also easy to apply for, with some of the best term life insurance providers not requiring a medical exam.
While term life insurance can be a more affordable alternative than whole life insurance, it also has downsides. For instance, since it is designed to end after a certain period, this means you'll need to apply for renewal and with renewal comes higher premiums. It may also be difficult to apply for this policy type as you age, but many providers have benefits specifically for older adults. Aside from this, term life insurance accumulates no cash value, unlike a whole life insurance policy.
Longer-term life insurance policies often come with higher premiums. This is because the longer the term, the more likely a provider will have to pay a death benefit. However, this may not be the case if you opt for a decreasing term policy.
The difference between term life and whole life insurance policies lies in the duration of the policy and the premiums paid. Generally, a term life policy is only in force for a certain period, while a whole life policy covers you until death. Since whole life policies carry more risk, they are often the more expensive choice.
Term life insurance benefits those who want an affordable life insurance option for a specified period. It is a no-frills option that allows individuals to get coverage easily.
Whole life insurance is a type of permanent life insurance that provides lifetime coverage with fixed premiums and a guaranteed death benefit. It also builds cash value over time, which grows at a set rate and can be borrowed against. Because of its predictability and long-term value, it’s often used for estate planning, covering final expenses or leaving an inheritance.
Unlike term life, whole life insurance doesn’t expire. As long as you keep paying the premiums, the policy remains in force. Some versions also offer dividends or investment-linked growth, giving policyholders additional financial flexibility.
There are various types of whole life insurance, each offering different ways to manage costs and grow value. Below are the main types of whole policies.
Indexed whole life insurance links your policy’s cash value to a market index, such as the S&P 500. This gives your policy the potential for higher growth than traditional whole life, without directly investing in the stock market.
It still includes the core features of whole life: a fixed premium and guaranteed death benefit. Most policies offer a minimum interest rate, protecting your cash value even if the market underperforms. This provides a balance of security and growth potential.
Modified whole life insurance starts with lower premiums for the first few years, which then increase after a set period (usually five to ten years). The structure makes it easier to afford coverage early on, with the expectation that your income will rise later. This type still includes guaranteed lifelong coverage and builds cash value over time. It’s often chosen by younger buyers or people expecting their finances to improve in the near future.
Whole life insurance policies can also be classified as either participating or non-participating.
MoneyGeek answered some of the most commonly asked questions about whole life insurance.
The cash value is the savings or investment component of a whole life insurance policy, which you cannot get with term life insurance. The cash value is a portion of your policy that earns interest tax-free, which you can withdraw or use to pay your premiums. When you cancel your policy, you receive the full cash value.
Whole life insurance costs more than term life insurance because it covers you until death or a specified age. It also carries more risk for insurers since they can't predict illnesses you may develop as you age.
Whole life insurance offers several advantages:
Whole life insurance has disadvantages:
Whole life insurance is best for those who start early and have beneficiaries already relying on them. The earlier you start, the lower your premiums will be for the rest of your life. It's also best for those who want to benefit from the savings component and have an extra fund when needed.
Universal life insurance (UL) is a permanent life insurance policy that offers more flexibility than whole life. Policyholders can adjust their premiums, death benefits, and cash value contributions over time. Unlike fixed-rate whole life policies, UL policies allocate a portion of your premium to a cash value account, which can be invested for potential growth.
There are two main types of UL: indexed universal life (IUL) and variable universal life (VUL). Both provide lifelong coverage and investment potential, but differ in how funds are managed and how much risk you take on.
Indexed universal life insurance ties your policy’s cash value growth to a market index, like the S&P 500, rather than individual stocks. This allows for moderate growth while protecting you from market losses through built-in floors and caps.
IUL policies are often chosen by conservative investors who want some exposure to the market without taking on full investment risk. Returns are limited by performance caps but won’t drop below the guaranteed floor, making this a safer option than directly investing in the market.
Variable universal life insurance gives you full control over how your cash value is invested. You can allocate funds across individual stocks, bonds, or mutual funds, with no caps or floors limiting growth or losses.
VUL offers higher growth potential but also comes with higher risk. When your investments underperform, your policy’s cash value and its ability to cover premiums can decline. VULs are best suited for policyholders who are comfortable with market volatility and long-term investing.
IUL policies link your cash value growth to a market index, including caps and floors, limiting gains and losses. VUL policies, on the other hand, invest directly in stocks, bonds, or mutual funds, offering more growth potential but exposing you to greater risk. Only VULs give you full investment control, and in some cases, shareholder voting rights when your policy holds company stock.
The main difference between universal and whole life insurance lies in flexibility and risk. Whole life offers guaranteed premiums and a fixed death benefit. Universal life, on the other hand, lets you adjust premiums and death benefits and invests a portion of your payments for potential growth.
Unlike whole life, UL policies don’t guarantee returns. Your cash value grows tax-deferred but is tied to market performance. Losses can reduce the fund below the required premium, putting your policy at risk. Universal life works best for those who are investment-savvy and comfortable managing long-term financial decisions.
Universal life insurance isn’t right for everyone, but it can be a good fit when you meet the following criteria:
Yes. In addition to your premium, both indexed and variable universal life policies charge monthly asset management fees. These are deducted from your policy’s cash value to cover the cost of managing your investments. When your policy’s value drops too low, you may need to pay the fees out of pocket to keep coverage active.
MoneyGeek answered some of the most commonly asked questions about universal life insurance policies.
In stocks, an index fund consists of several stocks, bonds and securities that make up a specific index. They share the same market trend. For example, high-risk, high-reward assets with fluctuating market values belong to the same category. Your fund manager’s job is to place your money in an index fund that matches your investment horizon and risk appetite.
IUL fund managers can invest your premiums into various indexes, from conservative, blue-chip options like the S&P 500 to more niche, high-risk markets like Hang Seng. Some indexes you might encounter include the following:
The availability of indexes can vary depending on the specific insurance provider and the terms of the IUL policy.
In an IUL, your premiums don’t go directly to the stock market. Instead, your fund manager invests them in market indexes that align with your goals, risk tolerance and investment horizon. You won't own individual shares, but you'll have a diverse index of various assets that complement each other.
An index cap limits the interest rate your insurer can credit during strong market performance, while the floor guarantees the minimum interest rate you’ll receive when the market underperforms. Caps and floors help manage market volatility by limiting gains and protecting against losses. The insurer sets these limits based on product terms.
IUL policies let you invest in market indexes, which generally carry less risk than individual stocks. Long-term investors might find the rewards too small. Given the diverse assets and fixed index floors/caps, your funds may not have much room to grow in the long run.
Long-term investors who want to make steady quarterly payments may not find IUL appealing. It generally suits conservative investors making a lump-sum payment.
Variable life insurance suits long-term investors with a high-risk appetite and a lengthy investment horizon. Given market fluctuations, you should let investments sit for decades. For short-term protection with a lump sum, consider IUL instead.
The No-Lapse Guarantee Agreement (NLGA) ensures that your policy stays in effect regardless of investment performance. In worst-case scenarios, you'll still get coverage when your fund value plummets. You'll need to get this rider or add-on upon application, which costs extra.
Professional fund managers will take over your portfolio. You must undergo the proper underwriting process to apply for a policy and insure yourself. You can't ask someone else to open a VUL policy for you.
You can adjust the amount of a variable death benefit. Work with your fund manager to hedge losses while making minimum monthly payments during recessions. You can also opt for fixed interest rates. When you have prior experience with stock investments, variable benefits will help you better maximize your fund value.
Most life insurance policies require a detailed underwriting process to assess your risk, often including a medical exam. Insurers consider your age, health, lifestyle, and even your hobbies to determine eligibility and pricing. The more detailed and accurate your health information, the more likely you are to qualify for lower premiums.
For those with medical conditions or who prefer to skip the exam, some life insurance options offer a faster, more accessible path to coverage, though often at a higher cost and with lower benefit limits.
Below are the main types of life insurance that don’t require a medical exam.
Group life insurance is offered through employers or organizations and covers a pool of people with a standard set of benefits. The employer often subsidizes premiums, and coverage is usually more affordable than individual whole life insurance.
However, group life coverage has limitations. You can’t customize your policy, and everyone receives the same benefits regardless of individual needs. Coverage usually ends when you leave the employer, and though exams aren't required, some group policies still deny applicants with terminal illnesses, hazardous jobs, or risky lifestyles.
For individual coverage with minimal hassle, simplified issue and guaranteed acceptance policies are options that avoid medical exams. Instead, insurers ask a few health questions and verify your answers using third-party sources. These policies are often used for final expense planning.
Guaranteed issue life insurance skips medical exams and accepts almost everyone, but it comes with trade-offs. Premiums are high, coverage is limited (often capped at $25,000) and most policies include a two-year waiting period. If you pass away during that time, your beneficiaries receive only the premiums paid plus interest.
Life insurance underwriting is how insurers evaluate your health and lifestyle to determine your premiums and coverage eligibility. Most life insurance policies fall into three underwriting categories.
In addition to term, whole, and universal policies, several other life insurance products are designed for specific needs, from covering end-of-life expenses to protecting couples or providing accident-only coverage.
Final expense life insurance is a permanent policy designed to cover funeral, burial, and related end-of-life costs. Coverage amounts are low, often between $5,000 and $25,000, but premiums are typically affordable, and acceptance rates are high, even for older adults or those with health issues.
This policy is best for people whose loved ones don’t need large financial support but would benefit from help covering final expenses. Just note that term and whole life insurance policies can also serve this role if structured properly.
Accidental death and dismemberment (AD&D) insurance pays a benefit if the insured dies or suffers serious injury, such as loss of sight, hearing, speech or a limb, due to an accident. It’s typically inexpensive and offered as a standalone policy or as a rider on traditional life insurance. However, it doesn’t cover illness-related deaths and is generally considered supplemental protection.
Joint life insurance covers two people, often spouses, under one policy. It pays out either after the first death (first-to-die) or after both policyholders pass away (last-to-die):
This type of policy can be more affordable than buying two separate plans but may offer less flexibility if the couple separates or has differing coverage needs.
Choosing a life insurance policy requires careful consideration. It's about finding the right coverage that aligns with your financial goals and provides security for your loved ones.
Start by evaluating your financial situation and identifying your dependents' needs. Consider your income, debts, living expenses and future financial obligations. This will help you determine how much life insurance coverage you need.
Your income level often determines which policy types provide the best value and fit your financial priorities. Consider the following recommendations as a starting point.
Research about the different types of life insurance policies available. Understand the differences between term, whole, universal and other life insurance policies.
Your age and life stage influence which type of coverage makes the most financial sense.
Prices can vary from one company to another for the same coverage, so get quotes from multiple insurance companies. Use online tools or work with an insurance broker to compare rates.
Your family structure determines both how much coverage you need and which policy types best protect your dependents.
Before making a decision, carefully read the policy details. Understand the terms, conditions, exclusions and the process for filing a claim. If there's anything you don't understand, don't hesitate to ask questions.
Beyond price comparison, understanding these key features helps you identify which policy type aligns with your long-term goals.
Look at the insurer's reputation for customer service and their financial stability. Check online reviews and ratings from independent agencies like AM Best and Standard & Poor's.
MoneyGeek analyzed dozens of insurers across coverage types, pricing, financial strength and customer service to help you find the best combination of coverage, service and value.
Once you've purchased a policy, reviewing it regularly and updating it as necessary is wise. Major life events can affect your coverage needs.
These major life changes often signal it's time to reconsider not just your coverage amount, but also your policy type.
Choosing the right life insurance policy goes beyond knowing the types. It’s about matching coverage to your goals, budget, and long-term needs. This guide walks you through how to make that choice, understand premium structures, and learn what actually makes up a policy. Whether you're buying for the first time or reviewing options, start here.
At its core, life insurance is a contract between you and an insurer. You pay regular premiums, and in return, the insurer promises to provide a death benefit to your chosen beneficiaries when you pass away. The goal is to provide financial protection for your loved ones, helping them cover everyday expenses, debts or major costs like education or housing. Whether you're considering term or permanent coverage, most policies include the same basic components:
The policy's term is how long it lasts. For instance, whole life insurance covers you for the rest of your life and will not expire. Term life insurance provides coverage for a fixed number of years.
The premium is how much you pay for the policy. You can pay on a monthly, quarterly or annual basis. You can even choose to pay a lump sum for a policy.
The death benefit is how much your beneficiaries will receive from your policy after you die.
This is who will receive the death benefit once you die.
These four elements form the foundation of any life insurance policy. No matter the type, they’re always present. In addition, you may have the option to add insurance riders, which are custom features that enhance your policy at an extra cost.
Life insurance riders are optional add-on benefits that customize your policy to meet specific needs beyond basic death benefit protection. Riders enhance your policy's value by addressing gaps that standard life insurance doesn't cover, making them worth considering during the application process.
The most common riders provide financial protection for various life scenarios.
Not every rider makes sense for every policyholder. Adding multiple riders can increase your premiums. Consider riders that address your specific concerns.
Your life insurance insurability, or the risk an insurer takes on when issuing a policy, can impact your premium. Factors such as age, health status, lifestyle habits (like smoking) and family medical history can all affect your insurability.
Securing a policy when you're young and healthy is often advantageous. Some policies, like guaranteed issue life insurance, offer coverage without a medical exam for people who are less healthy, but these plans may come with higher premiums. Always consider your current and future insurability when choosing a life insurance policy.
Your premium is the amount you pay to keep your life insurance policy active. The structure of these payments can vary depending on the policy type, your age, health, and financial goals. Understanding how different premium models work can help you choose a policy that fits your budget over time.
Premium Type | Description |
|---|---|
Level Premiums | Level premiums stay the same throughout the policy term, making them easy to budget for. This structure is common in term life insurance and some whole life policies. |
Flexible Premiums | Available in universal life insurance, flexible premiums let you adjust payment amounts and timing within set limits. This can be helpful if your income fluctuates or you want to increase contributions over time. |
Single Premiums | A single premium policy is funded with one lump-sum payment. It provides immediate, fully paid-up coverage and is best for buyers with significant cash on hand who want to avoid ongoing payments. |
Modified Premiums | With modified premiums, payments start lower for the first few years, then increase. This structure suits buyers expecting higher future income but requires planning for the later cost jump. |
Renewable Premiums | Some term life policies offer renewable premiums, allowing you to renew coverage without a medical exam. However, rates rise with age at each renewal. |
Choosing the right premium structure depends on how steady your income is, how long you need coverage and how much flexibility you want. If predictable costs are important, level premiums may make sense. If you need room to adjust, consider flexible or modified options.
Life insurance premiums vary based on policy type, your age, health status and coverage amount, making cost comparison essential when choosing between term, whole, universal and other policy options.
MoneyGeek's life insurance calculator provides personalized cost estimates, helping you compare monthly premiums. Our tool factors in your specific demographics and health profile to show realistic pricing from top-rated insurers, making it easier to balance affordability with adequate coverage.
We’ll give you a suggested amount of cover to buy in just 3 easy steps. — it's free, no personal information required, no spam.
Rates updated:
Jul 15, 2025
In this page, we explained the main types of life insurance (from term and whole life to universal, no-exam, and niche policies like AD&D and joint coverage). Each serves a different purpose, depending on your age, financial goals, health status and coverage needs.
If you want affordable, temporary protection, term life may be your best bet. For lifelong coverage with added financial value, whole or universal life might make more sense. And if you need simplified options, no-medical-exam policies can offer the right coverage, though often at a higher cost. Before choosing a policy, compare rates, review your coverage needs and consider how much flexibility you’ll want as your life changes.
Given the variety of life insurance choices, it can be challenging to determine which is best for you and your loved ones. Review some of the most frequently asked questions below to understand your options.
Your ideal life insurance coverage amount depends on your income and your family’s household expenses. Ideally, your death benefit should cover all their needs. If budget permits, the policy coverage should equal 10 to 12 times your annual income. However, if purchasing that coverage amount doesn't work for your current budget, you can gradually increase your coverage as your income increases over the years.
Life insurance doesn’t protect you; it protects your dependents. If you're the breadwinner, your family may have no income if you die unexpectedly. Life insurance provides your beneficiaries a financial safety net.
Several factors affect life insurance premiums. Rates will vary depending on your current medical condition, gender, age, coverage needs and policy type. To get an idea of how much you could spend, a healthy 40-year-old male would likely pay around $18 a month for a 10-year term life insurance policy with $250,000 coverage amount.
All policies include a premium, beneficiary, death benefit and term length. The conditions vary based on your insurer. For instance, a lesser-known insurance provider might offer much cheaper coverage, but you'll also have less assurance of its financial security.
The law doesn’t limit the number of life insurance policies you can get. As long as you have the money to pay your premiums, you can get as many whole and term life insurance policies as you want. Remember that they will lapse when you default on payments. Don't haphazardly increase your coverage to avoid losing all the money you paid.
Get a life insurance policy that suits your lifestyle. Consider your current income, household expenses, dependents, income sources and term-length needs. Don’t just copy other policy owners, as their policies may not be best for your situation.
There are several types of life insurance, but they generally fall into two categories: term life insurance and permanent life insurance. Term life insurance includes level term, yearly renewable term and decreasing term. Permanent life insurance includes whole life and universal life. Other types of insurance include no-medical exam policies, final expense, accidental death and dismemberment and joint life insurance.
There are different types of life insurance policies, varying in features and benefits. Four types of life insurance are the most well-known: term, whole, universal and variable policies.
The best type of life insurance depends on your individual needs, financial situation and long-term goals. Term life insurance is often a good choice for those needing coverage for a specific period, while whole life and universal life insurance can provide lifelong coverage and a cash value component. You may consult with a financial advisor or insurance professional to determine the best option for you.
Term life insurance is generally the least expensive type of life insurance. It provides coverage for a specific period, typically 10 to 30 years, and does not have a cash value component. Term life insurance premiums are usually lower than permanent life insurance policies like whole life or universal life.
A life insurance policy provides a death benefit, which is a sum of money paid out to the beneficiaries upon the policyholder's death. The coverage can be used to cover a variety of expenses, including funeral costs, outstanding debts and living expenses. Some policies also include a cash value component that grows over time and can be borrowed against if needed. Specific coverage details can vary based on the type of policy.
Term life insurance, which is one of the two main types of life insurance, provides the greatest amount of coverage for a specific period.
Whole life insurance policies guarantee payment of the face amount to the beneficiaries, provided premiums are maintained.
Decreasing term life insurance is designed to pay off outstanding balances as the benefit decreases over time, aligning with debt reduction.
Businesses often use key person life insurance to protect against the financial loss from the death of a critical employee. This can be in the form of term, permanent or variable life insurance.
Universal life insurance offers flexible premiums and an adjustable death benefit, providing adaptability to changing financial circumstances.
Finding the right life insurance policy can feel overwhelming with so many options, especially when you're comparing features like cost, flexibility, and long-term stability. To make that easier, we built a data-driven scoring system to evaluate life insurance policy types and providers based on the metrics that matter most when choosing coverage for yourself or your family.
We focused on the data that matters most to families, individuals planning long-term, and anyone comparing life insurance policy types and rates in today’s market.
Scoring Criteria and Weighting by Policy Type
We scored life insurance companies across five key categories:
Companies could earn up to five points in each category. These categories were weighted differently depending on the policy type to reflect the priorities of each audience.
General Life Insurance Rankings (Term):
Whole Life Insurance Rankings:
*Affordability was not considered for whole life insurance due to a lack of pricing data.
No-Medical-Exam Life Insurance Rankings:
*Affordability was not considered for no-exam policies due to limited quote availability.
Cheap Life Insurance Rankings:
Where the Data Came From
To develop these scores, we used the following sources:
Sample Applicant Profile for Quotes
We collected quotes using a base profile:
To reflect different buyer needs, we adjusted this profile by age, gender, health status, tobacco use, and location. We gathered term life quotes across multiple term lengths and coverage amounts. In cases where pricing data was unavailable, we analyzed observed patterns to estimate rate differences and product value.
Why This Methodology Works
Different buyers prioritize different things. Some focus on cost. Others want permanent coverage with cash value. Many prefer a simple buying process without medical exams. This research approach was built to account for those differences, helping you compare companies that align with your goals and give you confidence in your policy choice.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
