What is the difference between term and whole life insurance?

Term and whole life insurance are the two main types of life insurance, each with distinct characteristics:

Term Life Insurance

• Coverage period: Provides coverage for a specific period (10, 20, or 30 years).
• Cost: Generally more affordable with lower premiums.
• Cash value: No cash value accumulation - purely protection.
• Best for: Income replacement, mortgage protection, or coverage during child-rearing years.

Whole Life Insurance

• Coverage period: Provides lifetime coverage as long as premiums are paid.
• Cost: Higher premiums but remains level throughout life.
• Cash value: Builds cash value over time that you can borrow against.
• Best for: Estate planning, leaving a legacy, or lifelong coverage needs.

Most families start with term life insurance due to its affordability and adequate coverage for their primary needs.