LifePolicyFactsThe comparison
Whole life costs much more than term because it includes a cash value component. This tool takes the premium gap, invests it every year at the return you choose, and compares the result with the cash value stated in your whole life illustration for the same year.
Worked example
With term at 35 a month and whole life at 350, the gap is 3,780 a year. Invested at 5% for 30 years it grows to about 251,000 before tax and fees.
What it cannot show
It does not price needs beyond the term, lapse risk, guarantees, tax treatment or your own discipline. Ask for a full in-force illustration and read the guaranteed column, not only the projected one.
Frequently asked questions
Which is better, term or whole life?
Neither is better for everyone. Term suits a temporary need, whole life suits a lifelong need or estate purpose, and the numbers should be checked against your situation.
Where do I get the cash value figure?
From the insurer or adviser illustration, using the guaranteed values for a fair comparison.