Compare
Term life vs whole life insurance
Term life is protection for a set number of years and nothing else. Whole life lasts for life and includes a savings side. Term is simpler and usually the way to cover a large need on a smaller budget. Whole life suits people who want cover that never expires and are comfortable paying for it.
Side by side
How long it lasts
Term life
A fixed number of years.
Whole life
For your whole life, as long as you keep paying.
What it pays
Term life
A benefit to your family if you die during the term.
Whole life
A benefit to your family whenever you die while it is in force.
Savings or cash value
Term life
None. It is protection only.
Whole life
Builds a cash value over time that you may be able to borrow against.
How premiums compare
Term life
Lower for the same amount of cover.
Whole life
Higher, because it lasts longer and includes the savings side.
Best at
Term life
Covering a big need for a limited time, such as a mortgage or children’s school years.
Whole life
Lifelong needs, such as leaving something behind or covering final expenses.
What happens at the end
Term life
The cover stops when the term ends, unless it can be renewed or converted.
Whole life
There is no end date while the policy stays in force.
Where each one falls short
Term life
- Nothing comes back if you outlive the term.
- Renewing later can cost more as you age.
- It does not build savings.
Whole life
- It costs more for the same amount of cover.
- The savings side grows slowly, and stopping early can be costly.
- It asks for a long commitment.
How to decide
- 01
List what would need to keep being paid if you were gone: mortgage, school, daily living.
- 02
If those needs end in 10 to 25 years, term is usually the efficient answer.
- 03
If you want lifelong cover and can commit to the premium, ask about whole life, and keep the two separate from investing.
Common questions
Can I have both term and whole life?
Yes. Some people use term for the large, temporary needs and a smaller whole life plan for the lifelong one.
Which one is better for a young family?
Often term, because it gives a large amount of protection while the children and the mortgage need it. An advisor can size it to your family.
What is cash value?
A savings amount that builds inside some policies over time. How much, and how it can be used, depends on the plan, so read the illustration carefully.
General information only. It is not a quote, and it is not legal, tax or investment advice.
Not sure which fits you?
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