Comparison: Term Insurance vs Whole Life Insurance
Term Insurance Features
- Provides death benefits only
- Pays benefits only if you die while the term of the policy is in effect
- Most affordable life insurance to buy
- Purchased for a specific time; 5, 10, 15, or 30 years
- Becomes more expensive as you age, especially after age 45+
- Can be used as temporary additional coverage with a permanent life insurance policy
Whole Life Insurance Features
- Covers you for whole life
- Provides death benefits as well as a cash value accumulation that builds during the life of the policy
- Can be purchased without a medical exam, but at a higher cost
- Takes 12 to 15 years to build up a decent cash value
- Can be a good choice for estate planning
- Cash value is based on how much the return on investment is worth
- A portion of the cash value can be withdrawn or borrowed during the life of the policy
- Initially has more expensive premiums than term life insurance, but can potentially save you money over the life of the policy if in force for a considerable number of years