Term vs. Whole Life Insurance: The Complete Comparison

The Two Main Types

Term life provides coverage for a specific period (10, 20, or 30 years). Whole life provides lifetime coverage with a cash value component. Both provide a death benefit but work very differently.

Term Life Explained

You pay a fixed premium for the term. If you die during the term, beneficiaries get the death benefit. A healthy 30-year-old can get $500,000 coverage for $25-$40/month.

Whole Life Explained

Coverage for your entire lifetime with a cash value that grows. The same $500,000 coverage might cost $400-$600/month. Cash value grows slowly in early years.

Our Recommendation

For most people, buy term and invest the difference. Purchase affordable term coverage and invest the savings in tax-advantaged accounts like 401(k)s and IRAs.