Term vs Whole Life Insurance (2025)

Term life insurance is pure protection: you pay a fixed premium for 10, 20, or 30 years. If you die during the term, beneficiaries get the death benefit. Whole life is permanent coverage with a cash value component — premiums are 5–15x higher. For most families, term life wins: buy 20-year term for the child-rearing years, invest the premium difference in index funds. The cash value in whole life grows at 2–4% — index funds historically return 10%. The exceptions: high-net-worth individuals using whole life for estate planning, or business owners needing permanent coverage for buy-sell agreements.