Life Insurance
Types of Insurance Coverage: Find the Right Life Insurance
There are several types of insurance coverage, and the right one depends on how long you need protection, your health, and your budget. This page compares every type of life insurance Octans offers so you can see the differences at a glance and jump to the guide that fits.
- Term life is the lowest-cost way to cover temporary needs like income and a mortgage.
- Whole life and final expense last for life and build cash value.
- Guaranteed issue accepts everyone in the age range but has a graded benefit period.
- Comparing carriers matters as much as choosing the type.
Table of Contents
Life insurance types at a glance, with sample prices
Each kind of life policy has its own in-depth guide on our site. This table shows what each one is for, a published sample price where one exists, and where to read more. Sample rates are monthly, for non-smokers, from the sources named. They are samples, not a quote.
| Type | What it is for | Published sample rate | Read more |
|---|---|---|---|
| Term | Replacing income during working and child-raising years | $500,000, 20-year, age 40: $47 (female), $59 (male). MoneyGeek, Oct. 2026 | Term life insurance |
| Whole life | Lifelong coverage with fixed premiums and guaranteed cash value | $100,000, age 50: $168 (female), $192 (male). Choice Mutual, valid 3/9/2026 | Whole life insurance |
| Universal life | Permanent coverage with flexible premiums | No verified sample in our research | See the IUL guide below |
| Indexed universal life (IUL) | Permanent coverage with cash value tied to a market index | No verified sample; pricing depends heavily on funding | Indexed universal life |
| Final expense | Funeral and end-of-life bills, with a few health questions | $10,000, age 65: $41 (female), $54 (male). Choice Mutual, valid 3/9/2026 | Final expense insurance |
| Guaranteed issue | Coverage when health rules out other options; graded benefit at first | $10,000, age 70: $68.87 (female), $86.70 (male). Mutual of Omaha rate chart, effective 8/1/2026 | Guaranteed issue life insurance |
| Group life | Basic coverage through an employer, often with no health questions | Set by the employer plan; employer-paid cost over $50,000 is taxable (IRS Pub. 15-B) | Group life and health insurance |
Two related guides help with the choice between the first two rows: term vs whole life insurance and life insurance rates by age.
Health-related types of insurance coverage
Life insurance pays when you die. Health-related coverage pays bills while you are alive. For people 65 and older, most of these types of insurance coverage revolve around Medicare. Here is how Medicare.gov describes each piece:
- Part A helps cover inpatient hospital care, skilled nursing facility care, hospice and home health care. The 2026 inpatient deductible is $1,736 per benefit period (CMS). Read what is Original Medicare.
- Part B helps cover services from doctors and other providers. In 2026 the standard premium is $202.90 a month and the deductible is $283 (CMS).
- Part C (Medicare Advantage) “offers an alternative to Original Medicare for your health and drug needs.” Read Medicare Part C.
- Part D “helps cover the cost of prescription drugs.” Out-of-pocket drug costs are capped at $2,100 in 2026 (CMS). Read what is Medicare Part D.
- Medigap is “extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare.” Read what are Medicare supplements. Massachusetts uses its own plan names; see Medicare supplement plans in Massachusetts.
Under 65, the main health-related add-on is supplemental health insurance, which pays cash for events such as a hospital stay or accident. It works alongside major medical coverage, not in place of it. For a full overview, start with Medicare basics.
Which types of insurance coverage fit each life stage?
Needs change as your life does. This table is a starting point, not a rule. Your health, debts and family will shape the final choice.
| Life stage | Main risk | Coverage types to look at |
|---|---|---|
| Young and single | Co-signed debt; locking in a rate while healthy | Group life at work; small term policy (life insurance when you are young) |
| New parent | Loss of income while children depend on you | Term life sized to income and childcare years (life insurance for parents) |
| New homeowner | Mortgage left to a partner | Level term or mortgage protection |
| Business owner | Keeping staff; covering yourself without an employer plan | Individual term plus employee benefits for staff |
| Ages 50 to 64 | Term ending; group life ending at retirement | Conversion, new term or whole life (when term ends) |
| Turning 65 | Medical bills; enrollment deadlines | Medicare Parts A, B, D and Medigap or Medicare Advantage (when to enroll) |
| 70s and 80s | Funeral costs; leaving no bills behind | Final expense or guaranteed issue (life insurance over 80) |
Many people hold more than one of these at once. Group life rarely follows you when you leave a job, so it works best as a base layer under a policy you own.
Moving from one stage to the next is a good time to review. The NAIC says it is important to update your policies after a major life event, such as the birth of a child or a divorce. It also suggests checking your policies once a year to make sure all beneficiaries are included. A yearly review is also a chance to ask whether the types of insurance coverage you hold still match your needs.
How you qualify: full, no-exam and guaranteed issue
Policy type is one choice. How you qualify is another. The same kind of policy can be sold with different underwriting, and that changes how much coverage you can get and how fast.
| Underwriting | What you do | Published example |
|---|---|---|
| Fully underwritten | Application, health questions and often a medical exam | Usually needed for the largest amounts and best classes |
| Accelerated (no exam) | Health questions and data checks, no exam if you qualify | Banner Life: up to $5 million for ages 20 to 60 (Legal & General America) |
| Simplified issue | A short list of health questions | Mutual of Omaha: $40,000 maximum (Policygenius, June 2025) |
| Guaranteed issue | No health questions within the issue ages | Mutual of Omaha: $2,000 to $25,000, ages 45 to 85 (rate chart, effective 8/1/2026) |
Guaranteed issue comes with a trade-off. For death from natural causes in the first two years, the Mutual of Omaha product pays 110% of premiums paid instead of the full benefit, according to partner Navy Mutual. Accidental death is generally paid in full from day one. See our no-exam life insurance guide for more.
Riders: add-ons that change what a policy does
A rider adds a feature to a base policy. The NAIC describes several common ones:
- Waiver of premium: you can stop paying premiums if you develop a covered illness or disability named in the rider.
- Accidental death benefit: the policy pays more than the death benefit if you die in an accident.
- Guaranteed insurability: lets you raise your death benefit at set times without a medical exam. The cost depends on your age and the size of the increase, not your health.
- Long-term care: lets you use part of the death benefit for long-term care costs.
- Accelerated death benefit: lets you take money from the death benefit if you have a terminal illness and expect to die soon.
The Texas Department of Insurance adds children’s riders to the list. The NAIC also notes that adding a rider increases your premium. Ask for the rider cost on its own line so you can judge each one. Our living benefits guide covers the illness-related riders in more depth.
How to check an insurer’s financial strength
A policy is only as good as the company behind it. Three quick checks help:
- License. The NAIC says to “check with your state insurance department to verify that the company is authorized to do business in your state.”
- Ratings. The same NAIC guide notes you can check any life insurer’s financial stability through “several reputable national rating companies.”
- Complaints. The Texas Department of Insurance tells buyers to “check a company’s financial rating and complaint history.” Most state insurance departments publish complaint data or a company lookup.
Compare ratings from the same agency. Each agency uses its own scale, so a letter grade from one does not equal the same letters from another.
State guaranty limits: what is protected if an insurer fails
Every state has a life and health guaranty association. NOLHGA lists the typical limits in most states, as of June 1, 2025:
| Coverage | Typical limit |
|---|---|
| Life insurance death benefits | $300,000 |
| Life cash surrender and withdrawal values | $100,000 |
| Annuities (deferred) | $250,000 |
| Basic hospital, medical and surgical or major medical | $500,000 |
| Long-term care and disability income | $300,000 |
| Other health benefits | $100,000 |
Limits vary. NOLHGA notes that Connecticut, New York and Washington cover $500,000 in most categories, and many states cap the total per person across policies. Coverage generally comes from your state of residence when the insurer is ordered into liquidation. Find your state’s association through NOLHGA, or see our states page.
Hypothetical example. Luis owns a $500,000 term policy in a state with the typical $300,000 death benefit limit. If the insurer failed and he died, the association’s protection would cover up to $300,000. The other $500,000 − $300,000 = $200,000 would be above the limit. That is why checking an insurer’s strength matters most on large policies.
Hypothetical example: combining types of insurance coverage
Hypothetical example. The family below is hypothetical. Prices are published samples from the table above, not quotes.
Priya is 40, a non-smoker, with two young children. Her employer gives her group life equal to $100,000. She and her partner decide the family would need $600,000 if she died.
- Gap: $600,000 − $100,000 = $500,000
- A $500,000, 20-year term policy at the MoneyGeek sample for a 40-year-old woman: $47 a month, or $47 × 12 = $564 a year
- Group life premium cost to her: $0, if her employer pays it all
- Tax on group life: $100,000 − $50,000 IRS threshold = $50,000 of taxable coverage. At the IRS Table 2-2 rate of $0.10 per $1,000 a month for ages 40 to 44: 50 × $0.10 × 12 = $60 of imputed income a year
If Priya changes jobs, her group coverage likely ends, but the term policy stays. Later in life, she might add final expense coverage for funeral costs once the term ends. Mixing types of insurance coverage this way matches each policy to one job.
Questions to ask before you choose
Bring these questions to any agent or insurer. The answers will narrow the field quickly.
- How long do I need coverage: until a loan is paid, until my kids are grown, or for life?
- Do I want cash value, or only a death benefit at the lowest cost?
- Can this term policy be converted to permanent coverage later without a new exam? Until what age?
- Is the premium guaranteed to stay level? For how many years?
- Is there a graded or waiting period before the full benefit is paid?
- Which riders are included, and what does each optional rider cost on its own?
- Is the insurer licensed in my state, and what are its ratings and complaint record?
- What is my state’s guaranty association limit, and is my coverage above it?
- If I have group life at work, what happens to it when I leave or retire?
Write the answers down for each quote. Comparing the same facts side by side is the simplest way to see which policy fits.
Types of Insurance Coverage We Offer
Low-cost protection for 10, 20, or 30 years. Best for income and mortgage protection.Whole Life Insurance
Lifetime coverage, level premiums, and guaranteed cash value.Final Expense Insurance
$5,000 to $40,000 of whole life for funeral and final bills.Guaranteed Issue Life Insurance
No health questions; two-year graded benefit.Life Insurance for Seniors
Options for ages 50 to 85 compared side by side.Mortgage Protection Insurance
Coverage sized to your home loan so your family keeps the house.Indexed Universal Life (IUL)
Permanent coverage with index-linked cash value growth.Living Benefits
Access part of your benefit for terminal, chronic, or critical illness.Life Insurance for Children
Lock in coverage and insurability for a child.Supplemental Health Insurance
Cash benefits for hospital stays, accidents, and critical illness.Gerber Guaranteed Issue (Buy Direct)
Apply online for Gerber Life guaranteed issue whole life.Accidental Death Coverage
Affordable AD&D you can buy online.
Types of Life Insurance Compared
| Type | How long it lasts | Cash value | Typical amounts | Best for |
|---|---|---|---|---|
| Term life | 10–30 years | No | $100,000–$2,000,000+ | Income and mortgage protection |
| Whole life | Lifetime | Yes, guaranteed | $10,000–$1,000,000 | Lifelong needs, estate planning |
| Final expense | Lifetime | Yes, small | $5,000–$40,000 | Funeral and final bills |
| Guaranteed issue | Lifetime | Yes, small | $2,000–$25,000 | Serious health conditions |
| Indexed universal life | Lifetime if funded | Yes, index-linked | $100,000+ | Long-term accumulation |
| Mortgage protection | Loan term | Usually no | Mortgage balance | Keeping the family home |
Which Type of Insurance Coverage Do I Need?
Term life insurance, usually 10 to 15 times income for 20 or 30 years.I want to pay for my funeral
Final expense insurance of $10,000 to $25,000.I have serious health conditions
Simplified issue first, then guaranteed issue if declined.I just bought a home
Level term or mortgage protection sized to the loan.I want lifelong coverage and cash value
Whole life or indexed universal life.I am over 60
Compare term, final expense, and guaranteed issue by age.
How to Choose Between Types of Insurance Coverage
- Name the goal. Income replacement, a mortgage, funeral costs, or a legacy each point to different coverage.
- Decide how long you need it. Temporary needs fit term life; lifelong needs fit whole life or final expense.
- Be honest about health. Your health history determines whether fully underwritten, simplified issue, or guaranteed issue coverage is the best value.
- Compare carriers. Octans compares more than 120 carriers because underwriting varies widely between companies.
Coverage Available in Your State
Octans serves clients in 19 states. See the rules, free-look periods, and guaranty limits that apply where you live on our life insurance by state page.
More Resources
Source: NAIC consumer guide to life insurance.
Types of Insurance Coverage FAQ
What are the main types of life insurance?
The main types of insurance coverage for life are term life, whole life, universal life (including indexed universal life), final expense, and guaranteed issue. Term covers a set period; the others are permanent.
Which type of life insurance is cheapest?
Term life insurance is usually the cheapest per dollar of coverage because it lasts a set number of years and builds no cash value.
Can I have more than one type of coverage?
Yes. Many families combine a large term policy for income protection with a small whole life or final expense policy for funeral costs.
Related Coverage and Guides
Important: Octans Insurance agents are licensed in the states in which they operate. Coverage availability and rates may vary by state. Premium examples, when provided, are illustrative samples from published sources, not quotes. Final rates are determined by the insurance carrier based on underwriting and applicable policy criteria. Policy terms, exclusions, limitations, riders, and availability vary by carrier and state.
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(617) 935-9220 | life@octansinsurance.com