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 27, 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 gets complicated with so many options. You have more choices than just term or whole life policies. Different types cover different needs: short-term protection, lifelong coverage or end-of-life costs.
Some policies stay affordable with basic coverage, while others build cash value or offer flexible benefits. Here are the main types of life insurance and how they work:
Type | Coverage Length | Best for |
|---|---|---|
10 to 30 years | Affordable life insurance for a set period | |
Lifetime | Early planners with beneficiaries who rely on them financially | |
Lifetime | Permanent coverage with flexible payment options | |
Lifetime | High earners who are comfortable taking on investment risk | |
Lifetime | Seniors covering 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 work for specific situations but don't meet most people's primary life insurance needs.
Term life insurance covers a set period, typically 10, 20 or 30 years (with a few insurers offering 40-year terms). If you die during the term, your beneficiaries receive a death benefit, subject to policy terms and conditions.
If you outlive the policy, coverage ends with no payout. Term life stays affordable and straightforward, making it popular for protecting dependents during working years.
If you need long-term coverage, many term policies include conversion options that let you switch 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 circumstances change.
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 pay premiums, the policy stays active. Some versions also offer dividends or investment-linked growth, giving you additional financial flexibility.
You can borrow against your policy’s cash value, but doing so reduces both the available cash and the death benefit until the loan is paid back. Interest applies, and while the rate can be competitive with some consumer loans, it is not always the most affordable borrowing option. If a loan remains unpaid, the policy may eventually lapse.
Dividends can be taken as cash, used to lower your premiums, applied to purchase additional coverage or left in the policy to grow with interest.
Universal life insurance (UL) is a type of permanent life insurance that provides more flexibility than whole life coverage. You can adjust your premiums, death benefit and cash value contributions as your needs change. Part of each premium goes into a cash value account, which is invested for potential growth.
UL policies do not guarantee investment returns. The cash value grows tax-deferred but depends on market performance, and losses can reduce the account below the amount needed to keep the policy active. Universal life insurance is best suited for people who understand investing and are comfortable making 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 form of permanent coverage that lets you invest the policy’s cash value in different accounts such as mutual funds, stocks and bonds. It comes in two types: variable whole life with fixed premiums and variable universal life with flexible premiums.
Your cash value, and in some cases your death benefit, can increase or decrease based on market performance. Most policies include a guaranteed minimum death benefit even if the market performs poorly. Still, your cash value can still go down if the investments lose value.
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.
