LifePolicyFactsTerm life covers you for a fixed period and pays out only if you die within it. Whole life lasts for life as long as premiums are paid, and builds a cash value. The extra cost of that cash value is why whole life premiums are many times higher.
When term fits
Term suits needs that end, such as a mortgage or children growing up. It lets a younger family buy a large amount for a modest monthly price.
When whole life is considered
People look at it for a lifelong need, such as leaving money to a dependant with special needs or covering an estate cost. It can also appeal to those who have already used other tax-advantaged savings.
Check the illustration
Ask for guaranteed values and compare them with the premium gap. Early years usually show little cash value, so surrender within a few years can be costly.
Try your own quotes in the Term vs Whole Life Calculator.
Frequently asked questions
Can I convert term to whole life?
Many term policies include a conversion option. Check the deadline in the policy.
Does term pay out if I outlive it?
No. That is the reason it costs less.
Educational content only. Not insurance, financial or legal advice.