Term vs Whole Life Insurance

by Anonymous

Term life insurance provides pure death benefit protection for a set period at low cost, while whole life adds a cash value component that grows tax-deferred. Term is the right choice for most families needing affordable coverage during working years. Whole life makes sense in limited situations involving estate planning or permanent insurance needs, but its high cost makes it a poor investment vehicle.

Term Life Insurance

$25–$35/mo (30yr term)
monthly cost (35yo, $500k)
10, 20, or 30 years
coverage period
None
cash value
Level for term, then expires
premiums
None
dividends
Affordable coverage during working years
best for

Whole Life Insurance

$300–$500/mo
monthly cost (35yo, $500k)
Lifetime
coverage period
Yes, grows tax-deferred
cash value
Level for life
premiums
Yes (mutual companies)
dividends
Estate planning, permanent needs
best for

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