Term vs. Whole Life Insurance

Term life covers you for a set period (10–30 years) at a low cost; whole life lasts your whole life and builds cash value, but costs much more.

By the Home & Dime Editorial Team · Updated 2026

Term life

• Cheap, simple, covers a set term.
• No cash value.
• Best for income replacement while raising a family or paying a mortgage.

Whole life

• Permanent coverage + cash value.
• Much higher premiums.
• Best for lifelong needs and estate planning.

Frequently asked questions

Which is better?

Term is best for most people; whole life suits specific lifelong or estate needs.

Does term build cash value?

No — only permanent policies do.

Related guides

• What does life insurance cover?

Sources: Insurance Information Institute (iii.org); Consumer Financial Protection Bureau; FEMA; state Departments of Insurance. General information, not insurance advice.