The most common types of life insurance are term, whole, universal, variable and final expense. Specialty options may better suit certain situations.
Find the best type of life insurance for your needs.
Updated: November 3, 2025
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There are several types of life insurance. Each offers different costs, coverage lengths and features.
Specialty types include no-exam, joint, group, mortgage protection, credit, and accidental death & dismemberment life insurance.
There are two main types of life insurance based on coverage length. Term life insurance provides temporary protection, while permanent life insurance offers lifetime coverage.
Choosing life insurance can feel overwhelming with the numerous options available. 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.
Start with a clear breakdown of the main types of life insurance and how they work:
Type | Coverage Length | Best for |
|---|---|---|
10-30 years | Those who want affordable life insurance for a specified period | |
Lifetime | Those who start early and have beneficiaries already relying on them | |
Lifetime | Those wanting permanent coverage with payment flexibility | |
Lifetime | High earners comfortable managing investment risk | |
Lifetime | Seniors wanting to cover burial and end-of-life expenses |
Beyond these main categories, you'll find specialized policies like group life insurance through employers, no-exam policies with simplified approval, joint coverage for couples or business partners, and accidental death and dismemberment insurance. These serve specific situations but aren't suitable for most people's primary life insurance needs.
Term life insurance covers a specific period, typically 10, 20 or 30 years (with a few insurers offering 40-year term). If you pass away during the term, your beneficiaries receive a death benefit, subject to policy terms and conditions.
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 protecting dependents during their working years.
If you're considering long-term coverage needs, many term policies include conversion options that allow you to change to permanent coverage without medical exams within specific timeframes (usually the first 10 to 20 years). This flexibility means you can start with affordable term coverage and adapt as your life circumstances evolve.
Whole life insurance is a type of permanent life insurance that provides lifetime coverage with fixed premiums and a guaranteed death benefit. Whole life insurance 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, whole life insurance is often used for estate planning, covering final expenses or leaving an inheritance.
Unlike term life insurance, 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 additional financial flexibility.
You can borrow against your policy’s cash value, though loans reduce both the death benefit and available cash until repaid. Loan interest applies and may be competitive compared to some consumer loans, but it isn’t always the lowest-cost borrowing option. Unpaid loans may cause the policy to lapse.
Dividends can be taken as cash, used to reduce premiums, purchase additional coverage or left to accumulate with interest.
Universal life insurance (UL) is a permanent life insurance policy that offers more flexibility than whole life. You can adjust their premiums, death benefits and cash value contributions over time. UL policies allocate a portion of your premium to a cash value account, which can be invested for potential growth.
Universal life 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 insurance works best for those who are investment-savvy and comfortable managing long-term financial decisions.
Some universal life policies include a no-lapse guarantee, while others offer it as an optional rider for an added cost. This feature ensures your coverage stays in force even if your cash value falls to zero, as long as you pay the required minimum premiums. Without the guarantee, flexible premium payments involve more risk. The policy may lapse if contributions fall short and the cash value can't cover insurance charges.
Policy lapse risk varies by insurer and policy design. Consult your policy documents for specific lapse provisions.
Variable life insurance is a type of permanent life insurance that allows you to invest your policy's cash value in various investment accounts, including mutual funds, stocks and bonds. Variable life comes in two forms: variable whole life with fixed premiums, or variable universal life with flexible premiums. Your cash value and potentially your death benefit fluctuate based on market performance.
The policy includes a guaranteed minimum death benefit regardless of market performance, though your cash value can decrease if investments underperform.
Final expense life insurance is a permanent policy that covers 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. If appropriately structured, term and whole life insurance policies can also serve this role.
Other life insurance products are designed for specific needs. There are also various types based on the type of underwriting (how insurers evaluate your health and lifestyle to determine your premiums and coverage eligibility).
An annual renewable term (ART) policy renews yearly 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. ART is often used for stopgap coverage between longer-term policies.
Mortgage life policies are structured to pay off your remaining mortgage balance if you die before the loan is repaid. The death benefit decreases alongside your mortgage, and the lender is usually the beneficiary.
This type of temporary life coverage is offered with loans or lines of credit. If you pass away before the debt is paid off, the policy pays the remaining balance. The benefit decreases as the loan is repaid, and the policy ends once the balance hits zero.
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 inexpensive and offered as a standalone policy or as a rider on traditional life insurance. But it doesn’t cover illness-related deaths and is generally considered supplemental protection.
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.
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.
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 it may offer less flexibility if the couple separates or has differing coverage needs.
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.
Fully underwritten policies require detailed health questionnaires, medical exams and sometimes medical records review, but offer the best rates for healthy applicants.
If you have medical conditions or prefer to skip the exam, some life insurance options offer faster, more accessible coverage, though often at a higher cost and with lower benefit limits.
Here are the main types of life insurance that don’t require a medical exam.
Choosing a life insurance policy requires careful consideration. Find coverage that aligns with your financial goals and provides security for your loved ones.
Evaluate your financial situation and identify your dependents' needs. Consider your income, debts, living expenses and future financial obligations. Try using our life insurance calculator to quickly determine your coverage needs.
Research the different types of life insurance policies available. Learn about the differences between term, whole, universal and other life insurance policies.
Life insurance costs 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.
Carefully read the policy details before making a decision. Beyond price comparison, check 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.
Look at the insurer's reputation for customer service and its financial stability. Check online reviews and ratings from independent agencies like AM Best and Standard & Poor's.
Review your purchased policy regularly and update it as needed. Major life events, such as job changes that affect income or benefits, marriage or divorce, the birth or adoption of children, home purchase or major debt changes, and improvements in health, can impact your coverage needs.
*Life insurance regulations and available products vary by state. This information is for educational purposes only and should not replace professional insurance advice.
The main types of life insurance range from term and whole life to universal, variable, final expense and niche policies like AD&D and joint coverage, each serving different purposes based on your age, financial goals, health status and coverage needs.
Compare rates, review your coverage needs and consider how much flexibility you'll want as your life changes.
We answer common questions about life insurance types.
Term life insurance is the least expensive life insurance, providing coverage for a specific period, typically 10 to 30 years, without a cash value component. Term life insurance premiums are lower than those of permanent life insurance policies like whole life or universal life.
Longer-term life insurance policies often come with higher premiums because the longer the term, the more likely a provider will have to pay a death benefit. But this may not be the case if you opt for a decreasing term policy.
Permanent life insurance includes whole life, universal life and variable life policies. Unlike term insurance, permanent policies provide lifelong coverage and build cash value. Whole life offers guaranteed premiums and death benefits, while universal life provides flexible premiums and adjustable death benefits. Variable policies let you invest in market-based options.
Get a life insurance policy that suits your lifestyle by considering your current income, household expenses, dependents, income sources and term-length needs. The right policy for others may not work best for your situation.
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!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.
