Types of life insurance

There are many varieties of life insurance you can choose based on your needs, but there are two common types: term life insurance, and permanent life insurance like whole life insurance or universal life insurance. To pick the right option for you, you’ll need to know how they compare in terms of coverage, premiums, and additional benefits each can offer. You’ll also need to know what alternative life insurance policies are available in case your unique situation requires different protections.

Term vs. Whole Life Insurance

There are two major differences between term life insurance and whole life insurance: the period of time you’re covered under each policy and the cash value offered by whole life and universal life policies1. With term life insurance, you and your loved ones are protected for a specified period of time—usually 10, 20, or 30 years. Once that period expires, your beneficiaries are no longer eligible to receive the death benefit when you pass away. But with whole life insurance, you’re covered for life, as long as you continue to pay your premium2.

Whole life insurance also offers an additional benefit term life insurance does not—cash value. The cash value can be accessed during your lifetime to help you meet your financial goals3. For example, you can use it to help pay for a new house, cover education or medical expenses, or to supplement your retirement income.

Whole Life vs. Universal life insurance

Universal life insurance covers you permanently like whole life insurance, as long as you have enough cash value in the policy to pay the monthly costs. This may require you to pay a higher premium. Universal life also builds a cash value over time like whole life, but universal life insurance allows you to adjust your premium payment to accommodate changes to your income or other expenses. This flexibility means you should routinely review your policy, especially when interest rates change or you change your premium payments to avoid a policy lapse.4

Use this calculator to determine the cost of term life insurance at the coverage level you want.

Final expense insurance

Final expense insurance is a form of life insurance intended only to cover end-of-life expenses like funeral and burial costs. It helps protect your loved ones who might otherwise have to cover these expenses out-of-pocket, but final expense insurance is not intended to provide ongoing financial support to beneficiaries. Final expense insurance is a good option for someone who doesn’t have dependents relying on their income, but also doesn’t want their loved ones to undergo financial hardship in the case of their untimely death.5

Simplified Issue and Guaranteed Issue insurance

Most life insurance policies require applicants to undergo a medical exam as part of the application process, but Simplified Issue and Guaranteed Issue insurance policies do not. These policies are primarily designed for older applicants or applicants with serious health problems who may not be eligible for policies that require an exam. When applying for a Simplified Issue life insurance policy, you’ll be asked to fill out a health questionnaire in place of an exam. A Guaranteed Issue policy, on the other hand, requires no medical information to qualify for approval. Both Guaranteed Issue and Simplified Issue policies will typically offer lower levels of coverage, and premiums may be higher than for other types of policies offering similar coverage, but they can offer limited coverage to high-risk applicants.

For Joleen Mainz, life insurance was a professional passion and a personal necessity. See how Joleen was able to recover from family tragedy and debilitating injury using the protection offered by her insurance policies.

People also ask…

What is permanent life insurance?

Permanent life insurance is life insurance that covers you for your entire life rather than a limited period, as with term life insurance. Whole life insurance and Universal life insurance are two types of permanent life insurance that not only can cover you indefinitely, but also accumulate a cash value.

What is cash value life insurance?

Cash value life insurance is a permanent life insurance policy that builds a cash value that can be accessed during your lifetime for any reason. Both whole life insurance and universal life insurance are examples of cash value insurance.

What is variable universal life insurance?

Variable universal life insurance is a type of permanent insurance that invests the policy’s cash value into the underlying investment subaccounts.This cash value may increase or decrease based on the performance of the policy’s underlying investments.  Like universal life insurance, variable life insurance frequently offers flexible premium payments, where you can adjust the premium you pay each month to account for changes in your income or expensesThis flexibility means you should routinely review your policy, especially when market conditions change, to avoid a policy lapse.

What is group life insurance?

Group life insurance is a life insurance policy you buy at a group rate, usually through your employer. If your employer doesn’t offer life insurance, it’s still possible to buy your own individual life insurance policy.

Choosing life insurance

Which type of life insurance is right for you? That depends on your age, your financial situation, and other factors.  A financial professional can help you determine which policy is best for you, and which alternatives are available if a term, whole or universal life insurance doesn’t meet your needs. Learn more about buying life insurance or find a financial representative near you.

Finding a life insurance company

When you’re looking for long-term financial confidence, it’s important to choose providers and financial professionals you trust. Look for a life insurance company that shares your values and has the longevity to prove they’ll be there when you need them.7



Some whole life policies don’t have any cash values in years one or two. Whole life insurance should be considered for its long term value. Early cash value accumulation and early payment of dividends depend upon policy type and/or policy design, and cash value accumulation is offset by insurance and company expenses. Consult with your Guardian representative and refer to your whole life insurance illustration for more information about your particular life insurance policy.


All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims-paying ability of the issuing insurance company. Policy loans and withdrawals affect the guarantees by reducing the policy’s death benefit and cash values


Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.


Universal Life Insurance may lapse prematurely due to inadequate funding (low or no premium), increase in cost of insurance rates as the insured grows older, and a low interest crediting rate. This does not apply to universal life policies which have a secondary guarantee, but if the secondary guarantee requirements are not met the policy will most likely lapse.


Guardian and its subsidiaries do not issue or advise with regard to final expense insurance.


A Variable Universal Life (VUL) policy is considered both life insurance and a security and is sold with a prospectus. Premium and death benefit types are flexible. It’s crediting rate is based on the performance of the underlying investment options provided in the policy. There is no guaranteed interest rate. This type of policy may lapse due to low or negative performance of the underlying investment options, inadequate funding, and increasing cost of insurance rates. See your policy prospectus for more information.


Financial information concerning Guardian as of December 31, 2018, on a statutory basis: Admitted Assets = $58.5 Billion; Liabilities = $51.3 Billion (including $44.3 Billion of Reserves); and Surplus = $7.2 Billion

Group Insurance coverages are underwritten and issued by The Guardian Life Insurance Company of America, New York, NY.  Products are not available in all states.  Policy limitations and exclusions apply.  Optional riders and/or features may incur additional costs.  Plan documents are the final arbiter of coverage.