Term Life vs Whole Life Insurance Which is the Best for You

Having a life insurance can be the best way for you to protect your family’s financial in the future. As all of you know, your family may have a lot of expenses in your daily life, for example, utility bills, school tuition, mortgage payments, credit card payments, car loan payments, etc. When something happens with you or your spouse, your family may have difficulties in paying any of those costs. Therefore, you have to consider taking a life insurance. This type of insurance will give a death benefit for the family members.

If you die while you are covered by your insurance policy, your family will get a payout in installments or a lump sum depending on the policy. It is also important for you to calculate the total amount that you require to cover any expenses or costs of your family. A good rule of thumb in determining the total coverage required is by multiplying your income every year by 10 – 15. That will be the number that you are going to target as the coverage for your insurance. When we are talking about life insurance, there are two most common types of insurance, including, term life and whole life insurance.

Term Life

Term life insurance is usually available for 10 – 30 years depending on your needs. When you die during the term, your family will receive a death benefit and they will never be charged the future premiums. The policy will be no longer active after you die.



  • More affordable than the other insurance plans. It is very easy for you to protect the whole family at a very affordable rate. For example, a 34-years-old person can buy $1 million coverage through a 10-year protection period for less than $50 every month.
  • Good option for you who have mid-term financial plan. Many people take this term life insurance when they want to protect any major financial responsibilities. For example, you can take 20 year term life period until your children are financially independent or you complete the mortgage payments, etc.


  • Temporary coverage. This is one of the biggest drawbacks from this term life insurance. The policy is only active during the temporary period. Your family will never be covered when something happens after the insurance expires.
  • Increasing premium. When your term progresses, you are going to face rising premium very significantly. This rising premium usually occurs when you are planning to renew your term life period.

Good for you who want a life insurance that can:

  • Give you flexibility in planning your future finance in your family. You are not locked with the lifetime insurance policy
  • Protect your income until your children are financially stable in their mature ages
  • Be active for the same period with your financial responsibilities, for example, mortgage loan or car loan.

Whole Life Insurance

This is another type of insurance that is available on the market today. This insurance is a permanent life insurance. There is no expiration date from this policy. You and your family will get a lifetime protection without having to worry about the expired policy. There are some pros and cons that are offered by this type of insurance.


  • Cash value. This is one of the biggest benefits from whole life insurance. When you make a regular premium payment on the whole life insurance, a portion of your money will go to an account for building cash up from time to time. Your family can claim this cash value in addition to your death benefit. You can access this cash value, invest this money, or take a loan from this cash value at any time you want.
  • Dividend payment. Some insurance companies offer this opportunity to get dividends through the whole life insurance policy. This dividend will be paid through the policy holders annually. It can be used to add the cash value.


  • High cost. Whole life insurance is much more expensive than the traditional term life insurance. It is mainly caused by the lifetime coverage. It means that not everyone can have this type of insurance plan.

Good for you who want a life insurance that can:

  • Build up cash value by purchasing a whole life insurance policy
  • Give lifetime protection for your family
  • Offer the best tools for estate planning or saving plan


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