3 Types of Life Insurance Explained: Which One is Right for You?

Comprehensive life insurance, universal life insurance, and term life insurance are three main types of life insurance. When it comes to protecting your family's financial future, it's important to understand the different types of life insurance and how they work. In this article, we'll explain the main types of life insurance, including temporary, total, universal, variable and final expenses. We'll also discuss which type of coverage is right for you and your family.

If you take out life insurance for another person (a spouse, for example), the policy pays when that person dies. The premiums of many life insurance policies depend on changes in the company's investment profits, claim costs, and other expenses. Part of your premium goes to the cost of maintaining the insurance policy and the rest to the account with cash value. They can help you weigh the pros and cons of each type of coverage and buy the type of insurance that's right for your needs.

Temporary Life Insurance

Temporary life insurance is often the easiest type of life insurance to approve, especially if you're young and don't have serious health problems.

However, your eligibility will depend on several factors, such as your age, gender, lifestyle and health. Term life insurance is generally the most affordable and comprehensive type of life insurance because it's simple and has an expiration date.

Total Life Insurance

Total life insurance is a flexible permanent life insurance policy that allows you to reduce or increase the amount you pay in premiums. However, the interest rate on a universal life insurance policy is influenced by current market interest rates.

Group Life Insurance

Group life insurance is affordable and easy to apply for, but it rarely provides the level of coverage you might need and you're likely to lose coverage if you leave your job. In other words, it can be purchased to supplement a group life insurance policy that doesn't offer a large enough death benefit.

Final Expense Insurance

Final expense insurance is not usually as good value for money as term life insurance because of its high rates and lower coverage amounts.

In an MPI (mortgage protection insurance), the beneficiary is the mortgage company or lender, rather than your family, and the death benefit decreases over time as you make your mortgage payments, similar to a declining term life insurance policy.

Who Can Take Out Life Insurance?

Life insurance policies can be taken out by spouses or anyone who can show that they have an insurable interest in the person. However, you won't be entitled to guaranteed life insurance if you can't answer the application questions due to advanced dementia or Alzheimer's disease.


When it comes to choosing a type of life insurance that's right for you and your family, it's important to understand how each type works and what its benefits are.

Amanda Shih is a licensed expert in life, disability and health insurance, so she can help you weigh the pros and cons of each type of coverage and buy the type of insurance that's right for your needs...

Carl Somilleda
Carl Somilleda

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