The Basics: What Are You Buying?

Life insurance helps protect your loved ones financially if something happens to you. But when it comes to choosing a policy, the first big decision is often between term life and whole life. They're both types of life insurance — but they work in very different ways.

What Is Term Life Insurance?

Term life insurance provides coverage for a set number of years — commonly 10, 20, or 30. If you pass away during that time, your beneficiary receives a payout. But if the term ends and you’re still living, the policy simply expires.

Why Choose Term?

• Lower premiums: It's usually the most affordable option.
• Simple structure: No savings or investment components — just protection.
• Temporary coverage: Ideal for covering needs like a mortgage or raising children.

Example: You’re 35 and have a 20-year term policy. If something happens to you before you turn 55, your family gets the payout. After that, the policy ends — no payout, no refund.

What Is Whole Life Insurance?

Whole life insurance lasts your entire lifetime, as long as premiums are paid. In addition to the death benefit, it builds cash value over time — money you can borrow from or withdraw later in life.

Why Choose Whole Life?

• Lifetime coverage: No expiration as long as premiums are paid.
• Cash value: A portion of your premium accumulates like savings.
• Financial planning tool: Often used for estate planning or long-term wealth transfer.

Example: You buy a whole life policy at 30. It stays in place forever, builds equity, and pays out no matter when you pass away — even if you live to 100.

Term vs. Whole Life: Key Differences

• Duration: Term ends after a set period. Whole lasts for life.
• Cost: Term is cheaper up front. Whole life costs more but builds value.
• Cash Value: Term has none. Whole life grows equity you can use.
• Flexibility: Term is straightforward. Whole offers options like loans or dividends (in some cases).

Which One Should You Choose?

There's no universal answer — it depends on your budget, your needs, and your goals.

• Term life is great if you want affordable coverage during your working years, or to protect your family while paying off a home or raising kids.
• Whole life is ideal if you want lifelong protection, a way to pass on wealth, or access to built-in savings over time.

In fact, some people do both — term life for now, whole life for later. It doesn’t have to be either/or.

Still Unsure?

If you’re still not sure which is right for you, don’t worry. Our AI assistant can walk you through the pros and cons, answer common questions, and even connect you with a licensed expert when you’re ready to explore your options.