The Different Types of Life Insurance

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Compare The Different Types Of Life Insurance Policies

Use our calculator to compare the different types of life insurance, including term, whole, and universal life insurance coverage rates.

Term Life Insurance

  • Definition: Provides coverage for a specific period (e.g., 10, 20,30, or 40 years).
  • Features: Fixed premiums, no cash value accumulation.
  • Best For: Those seeking affordable coverage for a defined period.

Whole Life Insurance

  • Definition: Offers lifelong coverage with a fixed premium.
  • Features: Builds cash value over time, which can be borrowed against.
  • Best For: Those looking for permanent coverage and cash value accumulation.

Universal Life Insurance

  • Definition: A type of permanent life insurance with flexible premiums.
  • Features: Cash value accumulation, adjustable death benefits.
  • Best For: Those needing flexibility in premiums and coverage amount.
Life Insurance Coverage Types

Variable Life Insurance

  • Definition: Permanent life insurance with an investment component.
  • Features: Cash value is invested in various accounts, potential for higher returns.
  • Best For: Those seeking an investment component and willing to take on more risk.

Variable Universal Life Insurance

  • Definition: Combines features of universal and variable life insurance.
  • Features: Flexible premiums, investment options for cash value.
  • Best For: Those who want flexibility and investment options in their policy.

Indexed Universal Life Insurance

  • Definition: Similar to universal life but the cash value is tied to a market index.
  • Features: Potential for higher returns based on market performance.
  • Best For: Those looking for a balance between risk and growth potential.

Survivorship Life Insurance

  • Definition: Covers two people, typically pays out after the second person passes away.
  • Features: Often used for estate planning.
  • Best For: Couples looking to provide for heirs or cover estate taxes.

Final Expense Insurance

Group Life Insurance

  • Definition: Offered by employers or organizations to their members.
  • Features: Often part of employee benefits, may have limited coverage.
  • Best For: Employees or members seeking basic coverage through their employer or association.
Life Insurance

Additional Life Insurance Options:

  • Burial Insurance/Final Expense Insurance: Helps cover funeral costs and other final expenses, beneficial for those wanting to relieve their loved ones of financial burden after their passing.
  • Credit Life Insurance and Mortgage Life Insurance: Mortgage protection covers specific debts, ensuring they are not left to surviving family members.
  • Basic Life Insurance: Basic life insurance is often the foundation of a life insurance portfolio, providing essential coverage to assist families in maintaining their living standards during an individual’s death. Employers often provide it as part of a benefits package.
  • Guaranteed Issue Life Insurance: Often a choice for those with serious health issues, guaranteed issue life insurance offers coverage without a medical exam, albeit with higher premiums.

Related Reading: Whole Life vs. Term Life

Next Steps

Choosing the right life insurance depends on various factors including your financial situation, goals, and family needs. It’s often beneficial to consult with a financial advisor or insurance professional to make an informed decision.

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Frequently Asked Questions

What is life insurance?

Life insurance is an agreement between an individual and an insurance company. Upon the insured person’s death, the insurer pays a certain amount to a designated beneficiary. The primary objective is to provide financial protection to surviving dependents or beneficiaries.

What are the three main types of life insurance?

The three main types are whole, universal, and term life insurance.

The two types of life insurance are?

Term life insurance and permanent life insurance are the two main types.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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