Term vs. whole life insurance
For 90% of people with dependents, term wins by a wide margin.
5 min read · Updated 2026-07-04
Term
Term insurance covers you for a fixed period (10, 20, 30 years). It pays out if you die during the term. It has no cash value. It is cheap — a healthy 30-year-old can often get $500,000 of 20-year term for $20–$30 per month.
Whole life
Whole life covers you for your entire life and includes a cash-value component that grows over time. It costs 10–15 times more than equivalent term coverage. Most of that extra premium goes to fees and commissions in the early years.
Who whole life actually suits
High-net-worth households with estate planning needs, or families with a lifelong dependent (for example, a special-needs child). For everyone else, buying term and investing the difference in an index fund produces vastly more wealth and better protection.
Key takeaways
- Term is cheap; whole life is 10–15x more expensive.
- For most families, term + index fund beats whole life every time.
- Whole life is a niche estate-planning tool, not a general recommendation.
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Educational content only. Not individualized financial, tax, or legal advice.