The Three Types of Life Insurance Everyone Should Know | Bryan Miranda

By: Bryan Miranda

One of the more common questions we get as advisors regarding life insurance is about what type of coverage is most appropriate. There are 3 main types of insurance that I'll cover today. In the end, maybe this will shed some light on how these might fit together for you.

Term life insurance is a policy that provides financial protection for a specific period—often 10, 20, or 30 years. If the insured person dies during the term, the beneficiaries receive a death benefit; if they outlive the policy, coverage ends unless renewed. Term insurance is typically purchased individually and is known for offering a large amount of coverage at a relatively low cost. The pros of term life include affordability, flexibility in policy length, and straightforward coverage without an investment component. Its cons are that it expires after the selected term and does not build cash value. Term life insurance is most appropriate for people who need coverage for a defined time or specific financial obligations. It's ideal for people who need protection during certain life stages, such as while raising children, paying off a mortgage, or providing for dependents until retirement savings accumulate.

Employer life coverage, often called group life insurance, is provided as a benefit through one's job. The employer either covers the cost or offers a subsidized premium. Coverage amounts are usually limited—commonly one or two times the employee's annual salary—and typically end when employment does. Employer life coverage is easy to obtain and often free or inexpensive, making it a good baseline benefit. However, its drawbacks include limited coverage, lack of portability (you lose it if you leave your job), and no option to grow a policy's value. While convenient and affordable, employer life coverage alone might not offer sufficient protection, especially for workers with significant financial obligations or dependents relying on their income.

Permanent life insurance (such as whole life, variable life or universal life), by contrast, is built for lifelong protection and includes a cash value component you can borrow against or use later in life. Some policies offer added benefits, often called riders, which can help cover long-term care expenses, chronic care expenses, or even provide direct payouts based on certain health diagnoses. You can also get tax-favorable treatment by taking loans out against your policy. You may have seen this marketed online as a way to "create your own bank"—it's often touted as one of the biggest draws to setting up a permanent policy. But that same flexibility can create problems down the road if the policy isn't managed correctly. Monitoring these policies is just as important, if not more so, than setting them up in the first place. Permanent life insurance tends to be the best fit for people who've maxed out their other savings vehicles, want a guaranteed death benefit that never expires, or have a specific need—like estate planning or providing for a dependent with lifelong care needs—that term coverage can't address.

Given these tradeoffs, most people don't rely on just one type. Combining a personal term or permanent policy with employer coverage often provides the most comprehensive financial safety net while also giving you and your family flexibility to use these tools to their full capacity. It's best to bring this topic up with your advisor to make sure you're covered the right way, for the right amounts, given your situation.

Gerber Kawasaki Wealth & Investment Management is an investment advisor located in California. Gerber Kawasaki Wealth & Investment Management is registered with the Securities and Exchange Commission (SEC). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Gerber Kawasaki only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Gerber Kawasaki Wealth & Investment Management 's current written disclosure brochure filed with the SEC which discusses, among other things, Gerber Kawasaki Wealth & Investment Management's business practices, services and fees, is available through the SEC's website at: 

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Bryan Miranda is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$4.78B billion in assets under management and assets under advisement as of 6/30/26. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results."

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