Compare Term and Whole Life Insurance


  • Tend to be less expensive than permanent life insurance
  • Can be converted to whole life insurance
  • Coverage is temporary
  • Health issues or age can make it difficult to requalify
  • No cash value


  • The policy can last until the death
  • It can provide guaranteed cash value
  • Smaller death benefit than term life for the price
  • Generally more expensive than term policies

Unlike a term policy, whole life insurance is a type of permanent life insurance, meaning it lasts until death. If you were to buy a whole life policy at age 25, you wouldn’t have to worry about not qualifying for coverage or paying a higher premium when buying later in life. That’s especially true if you were to develop a health condition. With a term policy, on the other hand, a diagnosis would raise your premiums, as would your age. That said, if your term policy had a conversion option, you might be able to turn it into a whole life policy. But that will cost more.

Over time, a whole life policy also builds tax-deferred cash value, which you can borrow against. And because the cash value earnings are guaranteed, it’s a reliable source of savings. That’s not something you’ll find with a term policy. Term policies also have the benefit of offering coverage at a lower cost than you’ll typically find with permanent policies since death may be less of a risk during a limited term. That means you’d have to pay more if you wanted the same level of coverage that you might get with a term policy, especially if you’re comparing the cost to a shorter-term policy.

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