Life Insurance Estimator
Term vs. Whole Life Insurance Cost Comparison
Compare the premiums for term and whole life coverage, and what investing the difference could be worth.
This is a rough illustration for education, not financial advice. It compares only premiums and an assumed investment return; it ignores whole life's cash value, guarantees, dividends, loan features, and any tax treatment, all of which vary a lot by policy and insurer. Nothing you type is sent anywhere.
"Buy term and invest the difference"
Term life insurance is much cheaper than whole life for the same coverage, because it has no savings or cash value component. A common strategy is to buy the cheaper term policy and invest the money you would have otherwise paid for whole life. This calculator shows what that invested difference could grow to over your comparison period, at an assumed rate of return, so you can compare it with the cash value a whole life policy might build (ask your insurer or agent for their actual illustration).
Frequently asked questions
Is whole life ever a good choice?
It can suit specific goals, such as guaranteed lifelong coverage, estate planning, or a source of forced savings with a guaranteed minimum. It is not simply "bad," but it is a different product with different goals than term insurance, and it costs much more per dollar of death benefit.
Does whole life guarantee a good return?
Whole life cash value growth is usually slow in early years and depends on the insurer's dividends and guarantees, which are not the same as market investment returns. Compare an actual policy illustration with this calculator's assumed return.
What if I invest less disciplined than assumed?
The "invest the difference" strategy only works out if you actually invest the savings rather than spend them. If you would not reliably do that, the forced savings of a whole life policy may suit you better despite the higher cost.
Related: the coverage estimator, the savings calculator and the retirement tools.