Term vs Whole Life Insurance: What's the Difference?
Term life covers you for a set period (like 20 or 30 years) and is cheap. Whole life covers you for life and builds a cash value, but costs many times more for the same death benefit.
| Term life | Whole life | |
|---|---|---|
| How long it lasts | A fixed term, e.g. 10–30 years | Your whole life, while premiums are paid |
| Cost for the same coverage | Low | Typically 5–15× higher |
| Cash value | None | Yes — grows slowly; fees are high early on |
| Premiums | Fixed for the term | Fixed for life |
| Best for | Replacing income while kids or a mortgage depend on you | Lifelong needs like estate planning or a dependent who will always need support |
Bottom line
Most households only need coverage until debts are paid and kids are grown — term covers that for far less. Investing the price difference usually beats whole life's cash value.