Term vs Whole Life Insurance

Compare Benefits, Rates, & Companies

Most insurance policies fall under two main umbrellas: term life insurance and permanent life insurance.

The key differences in the two types of life insurance are the period of coverage, the payout, and protection provided. Different types of life insurance are designed to suit the needs of different individuals at their unique stages of life.

Learn the differences between term vs whole life insurance below.

Quick Navigation

What Is Term Life Insurance?
What Is Whole Life Insurance?
Benefits of Term vs Whole
Who Should Buy Term vs Whole?
Term Life Insurance Rates
Best Term Life Insurance Companies
Whole Life Insurance Rates
Best Whole Life Insurance Providers
Apply for the Best Life Insurance Policy

Term vs whole life insurance guide

What Is Term Life Insurance?

Term life insurance is a policy with coverage for a specific time limit. Normally 15 years, 20 years, 25 years, 30 years, but policies can be longer.

If the person dies during the set term (or time period), the insurer pays a death benefit to the beneficiary. However, if the person does not pass away during that set term, then no payout of any kind is received by the beneficiary.

In addition, no part of the premiums is paid back. Term life insurance is the most basic option that can be purchased. It is affordable because it offers pure death benefit protection only.

Available Term Periods (Lengths)

You can buy term life insurance in increments of 10, 15, 20, 25 or 30-year terms. Most term life policies will expire at the of age 95, no matter the term period.

Your policy rate or premium will be locked in for the duration of your term. But when the term period expires, that guaranteed rate is over, and renewing or beginning a new term with cause the cost to go up significantly.

Generally speaking, costs increase with the length of the term. So 20-year is more expensive than 15-year, which is more expensive than 10-year. This is because you’re paying for a longer rate guarantee.

Some life insurance companies offer a term period as short as one year, sometimes called Annually Renewable Term (ART). These policies can be renewed for one-year intervals.

Pros and Cons of Term Life Insurance

Term life is the simplest, and the least expensive. You’ll match your terms to meet your needs. On the flip, your coverage is temporary and you may very well pay premiums for decades and “get nothing out of it.”

It’s risk management, not an investment. To put things into perspective with a metaphor, term life insurance is very similar to renting a house.

It provides you with protection for a specific term or period of time. You essentially “rent” your policy until it expires, like a lease. If you survive the policy then you’ll be left with no “equity”.

What Is Whole Life Insurance?

Whole life insurance symbolAlso referred to as permanent life insurance, whole life insurance is the major alternative to term life insurance.

It offers coverage for your entire life.

Whereas term life insurance may end at age 75, 85, or 95, whole life is guaranteed to last until you pass, even past age 100.

In contrast to term life insurance, permanent life insurance builds cash value over the course of the policy. It offers what term life insurance does and more, both death benefit protection and a cash value!

Is a Whole Life Policy a Good Investment?

For many people, a whole life insurance policy is a good investment. This is because the money you contribute to the cash value portion is allowed to grow on a tax-deferred basis. Many policies pay out dividends to their policyholders (also untaxed!), which help the cash value grow.

Can you Convert a Term Life Insurance Policy to Whole Life?

Perhaps you purchased term life insurance at a younger age, and you’re nearing the end of term with no future plan in place. Luckily, most term life insurance policies can be converted to whole life insurance before the age of 75.

Pros and Cons of Whole Life Insurance

The major benefit with whole life insurance is that you get a lifetime of coverage, that accrues a cash benefit. Unlike term life insurance, you have access to your money and control how you use it. The main drawback is paying higher premiums.

Benefits of Term vs Whole Life Insurance

Term life insurance and whole life insurance can be great options depending on your situation. Here are the benefits of each.

Policy Benefits Term Whole
Lower premium costs
Insurance coverage for your whole life
Premium doesn’t change (usually)
Cash value accumulation
Possibility of earning dividends
Different policy lengths available

As you can see, whole life insurance offers slightly more benefits but does come at a higher cost.

Should I Buy Term or Whole Life Insurance?

It depends.

Term Life Insurance is Best For…

For single millennials and even young families, term insurance can be a good option. For those who seek protection against the loss of income of a primary earner for a stated period of time, at an affordable cost, term life insurance is ideal.

Those with pre-existing conditions or health complications beware, a medical examination will be required. If you are less than 35 years of age and in good health, you could lock in an excellent fixed rate on term life insurance.

Whole Life Insurance is Best For…

However, if you have a sizable estate or amount of assets to protect, whole life insurance offers a larger amount of coverage that you can customize. It is also ideal for people who want to you use life insurance as an investment, gaining the living benefits it has to offer.

Term Life Insurance Rates

Read below for term life insurance rates for healthy adults, smokers, and diabetics.

Term Life Insurance Rates for Preferred Health

Health people pay far less for life insurance than people with medical conditions or high-risk people.

Males

Age Term Length Face Value Monthly Rate
30 10 Years $500,000 $13/mo.
20 Years $500,000 $20/mo.
30 Years $500,000 $34/mo.
40 10 Years $500,000 $19/mo.
20 Years $500,000 $31/mo.
30 Years $500,000 $58/mo.
50 10 Years $500,000 $46/mo.
20 Years $500,000 $82/mo.
30 Years $500,000 $140/mo.
60 10 Years $500,000 $122/mo.
20 Years $500,000 $235/mo.
30 Years $500,000 N/A

Females

Age Term Length Face Value Monthly Rate
30 10 Years $500,000 $12/mo.
20 Years $500,000 $17/mo.
30 Years $500,000 $28/mo.
40 10 Years $500,000 $17/mo.
20 Years $500,000 $27/mo.
30 Years $500,000 $45/mo.
50 10 Years $500,000 $37/mo.
20 Years $500,000 $61/mo.
30 Years $500,000 $107/mo.
60 10 Years $500,000 $83/mo.
20 Years $500,000 $158/mo.
30 Years $500,000 N/A

Term Life Insurance Rates for Smokers

Smokers generally have to pay more for life insurance, since it is a known risk for cancer and other medical conditions.

Males

Age Term Length Face Value Monthly Rate
30 10 Years $500,000 $52/mo.
20 Years $500,000 $72/mo.
30 Years $500,000 $115/mo.
40 10 Years $500,000 $81/mo.
20 Years $500,000 $133/mo.
30 Years $500,000 $216/mo.
50 10 Years $500,000 $198/mo.
20 Years $500,000 $327/mo.
30 Years $500,000 $530/mo.
60 10 Years $500,000 $477/mo.
20 Years $500,000 $767/mo.
30 Years $500,000 N/A

Females

Age Term Length Face Value Monthly Rate
30 10 Years $500,000 $40/mo.
20 Years $500,000 $58/mo.
30 Years $500,000 $85/mo.
40 10 Years $500,000 $65/mo.
20 Years $500,000 $105/mo.
30 Years $500,000 $156/mo.
50 10 Years $500,000 $149/mo.
20 Years $500,000 $239/mo.
30 Years $500,000 $398/mo.
60 10 Years $500,000 $326/mo.
20 Years $500,000 $547/mo.
30 Years $500,000 N/A

Term Life Insurance Rates for Diabetics

Diabetics also pay more for term life insurance. These sample rates can give you an idea of how much a term policy might cost.

Males

Age Term Length Face Value Monthly Rate
30 10 Years $500,000 $50/mo.
20 Years $500,000 $68/mo.
30 Years $500,000 $111/mo.
40 10 Years $500,000 $68/mo.
20 Years $500,000 $107/mo.
30 Years $500,000 $187/mo.
50 10 Years $500,000 $112/mo.
20 Years $500,000 $161/mo.
30 Years $500,000 $289/mo.
60 10 Years $500,000 $231/mo.
20 Years $500,000 $445/mo.
30 Years $500,000 N/A

Females

Age Term Length Face Value Monthly Rate
30 10 Years $500,000 $43/mo.
20 Years $500,000 $59/mo.
30 Years $500,000 $96/mo.
40 10 Years $500,000 $55/mo.
20 Years $500,000 $83/mo.
30 Years $500,000 $140/mo.
50 10 Years $500,000 $82/mo.
20 Years $500,000 $119/mo.
30 Years $500,000 $209/mo.
60 10 Years $500,000 $150/mo.
20 Years $500,000 $304/mo.
30 Years $500,000 N/A

Popular Riders and Options

Riders are the additional benefits that can be bought and added to a basic insurance policy. You’ll pay a little more, but gain flexibility and control in how you choose to increase or decrease your coverage.

If you might want more coverage, look into the guaranteed insurability, accidental death, long-term care, and family income benefits riders. These riders account for significant life changes that you might want to take into consideration as you plan your life insurance policy.

Best Term Life Insurance Companies

Based on data from JD Power customer satisfaction reviews, you can confidently purchase quality term life insurance from these top companies Protective Life, Banner Life, AIG, Ameritas, and Lincoln Financial.

Company A.M. Best Rating Customer Reviews
Protective Life A+ 4.3/ 5
Banner Life A+ 4.2/ 5
AIG A 4.1/ 5
Ameritas A+ 4.0/ 5
Lincoln Financial A+ 4.1/ 5

Whole Life Insurance Rates

Below are sample rates for whole life insurance policies with $500,000 in coverage based on age and health.

Whole Life Insurance Rates for Preferred Health

If you are healthy, you will pay less, but whole life policies are still more expensive than term policies.

Males

Age Face Value Monthly Rate
20 $500,000 $152/mo.
30 $500,000 $160/mo.
40 $500,000 $248/mo.
50 $500,000 $682/mo.
60 $500,000 $1,464/mo.

Females

Age Face Value Monthly Rate
20 $500,000 $128/mo.
30 $500,000 $136/mo.
40 $500,000 $216/mo.
50 $500,000 $484/mo.
60 $500,000 $996/mo.


Whole Life Insurance Rates for Diabetics

Males

Age Face Value Monthly Rate
20 $500,000 $500/mo.
30 $500,000 $544/mo.
40 $500,000 $856/mo.
50 $500,000 $1,386/mo.
60 $500,000 $2,772/mo.

Females

Age Face Value Monthly Rate
20 $500,000 $528/mo.
30 $500,000 $472/mo.
40 $500,000 $644/mo.
50 $500,000 $1,012/mo.
60 $500,000 $1800/mo.

Whole Life Insurance Rates for Smokers

Males

Age Face Value Monthly Rate
20 $500,000 $520/mo.
30 $500,000 $576/mo.
40 $500,000 $1,064/mo.
50 $500,000 $2,783/mo.
60 $500,000 $5,724/mo.

Females

Age Face Value Monthly Rate
20 $500,000 $392/mo.
30 $500,000 $464/mo.
40 $500,000 $840/mo.
50 $500,000 $2,156/mo.
60 $500,000 $3,912/mo.

Best Whole Life Insurance Providers

Based on data from JD Power customer satisfaction reviews, you can confidently purchase quality term life insurance from these top companies Prudential, Mutual of Omaha, Northern American, Cincinnati Life, and Ameritas.

Company A.M. Best Rating Customer Reviews
Prudential A+ 4.2 / 5
Mutual of Omaha A+ 4.1 / 5
North American A+ 4.1 / 5
Cincinnati Life A 4.2 / 5
Ameritas A+ 4.1 / 5

Apply for the Best Life Insurance Policy for You

Which type of life insurance is right for you?

When it comes to finding the best life insurance for you and your family, you want to be sure that you compare and fully understand your policy options. As you compare term vs. whole life insurance, consider the advantages and disadvantages of each. Your final decision will be based on your unique needs and circumstances.

Our independent life insurance agents work with some of the best whole and term life insurance companies on the market to help provide our clients with affordable life insurance rates that fit their needs.

Give us a call today to discuss term vs whole life insurance or use our online quoting tool for quick and easy life insurance rates!

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