Types of life insurance, explained.
The three most common types of life insurance are term life insurance, whole life insurance, and group life insurance. Read on to learn the unique differences between each.
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What’s the difference between term, whole, and group life coverage?
Whole life insurance lasts for your entire life and can be used as an investment vehicle, unlike term policies, which expire after your chosen length. Whole life insurance policies typically cost 10–20x more than term policies for the same amount of coverage.
Whole (Permanent) Life Insurance
  • Some insurers invest your whole life premium payments and the interest earned on those investments goes back into your policy as accrued cash value. However, in many cases, the interest earned does not offset the 10-20x cost of the policy premiums.
  • Whole life insurance is a good option for anyone with complex financial situations or estate planning needs, but term life is a better option for most people because it’s much simpler and it costs a lot less.
Group (Employer-Sponsored) Life Insurance
  • Group life insurance is provided through your workplace and can be either term or whole life insurance.
  • Even if you have employer-sponsored life insurance, you may want to consider additional coverage for your family.
  • Employer-sponsored policies typically only cover 1-2x your salary while you are employed full-time, and this coverage generally ends once you leave the company.
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