Term life insurance provides coverage for a fixed period – commonly 10, 20, or 30 years – and pays a death benefit if you pass away during that term. If the term ends and you’re still alive, coverage simply expires unless renewed.
Whole life insurance provides coverage for your entire life, as long as premiums are paid, and includes a cash value component that grows over time and can be borrowed against.
Term life is generally significantly cheaper than whole life for the same death benefit, since it doesn’t build cash value and only covers a set period.
Whole life costs more but offers lifelong coverage and a savings-like component, which appeals to buyers who want both protection and a long-term financial asset.
For many buyers, especially those primarily seeking to protect dependents during working years, term life offers more coverage per dollar. Whole life tends to suit specific estate-planning or long-term goals.