Choosing between term life and whole life insurance is one of the most common — and most important — decisions you’ll make when shopping for life insurance. Here’s a clear, side-by-side comparison to help you decide.
What Is Term Life Insurance?
Term life insurance provides coverage for a defined period — usually 10, 20, or 30 years. If the policyholder dies within the term, the beneficiaries receive the death benefit. If the policyholder outlives the term, the coverage ends. Term life is the most affordable type of life insurance and is ideal for people who need substantial coverage during specific life stages.
What Is Whole Life Insurance?
Whole life insurance provides permanent, lifelong coverage with a guaranteed death benefit. It also includes a cash value component that grows over time on a tax-deferred basis. Whole life premiums are higher than term, but they are fixed and the policy never expires.