Term vs Whole Life Insurance: What’s the Difference and Which One is Right for You?

If you’ve ever googled ‘term life vs whole life’ or asked yourself, ‘Do I really need life insurance?’ – you’re not alone. Understanding the difference between term and whole life insurance can feel confusing at first, but knowing how these policies work can help you make a confident, informed decision. In this blog, we’ll break down the key differences, compare costs, bust a few common myths, and walk through real-world examples to help you determine what might work best for you, your goals, and your budget.

Understanding the Basics

Let’s start with a simple breakdown of the two most common types of life insurance:

Term life insurance offers coverage for a set period (typically 10, 20, or 30 years). If the insured person passes away during that time, the policy pays a benefit to their beneficiaries. If the term ends and you’re still living, the coverage ends with no cash value or payout. 

Whole life insurance (permanent life insurance) provides lifelong coverage and includes a cash value component that grows over time. Premiums are typically higher but remain level throughout the life of the policy. 

At a glance:

Cost Comparison: Term Life vs Whole Life

One of the most significant differences between these policies? Cost. 

Term life insurance is generally much more affordable. It’s designed to provide high coverage for a lower cost, making it appealing to young families or those covering specific financial obligations. 

Whole life insurance can cost 5 to 15 times more than a term policy of the same death benefit. That’s because it includes a savings component and guarantees coverage for life. 

Example:

A healthy 35-year-old might pay:

• ~$25/month for a $500,000 20-year term policy 
• ~$300/month for a $500,000 whole life policy 

Pros and Cons of Life Insurance Options

Whole Life Pros

• • Lifetime coverage
  • Builds cash value that you can borrow from
  • Can be used as part of a legacy or wealth strategy

Whole Life Cons

• • Higher premiums
  • Takes time to build cash value
  • Less flexible if the budget changes

See Life Insurance In Action

If you’re wondering how this all plays out in real life, check out our case study featuring Lindsay and Marcus, a young couple who added life insurance as part of their broader financial plan. Their story shows how thoughtful planning can create confidence for the road ahead, not just for the unknowns but for the life they’re actively building.

How We Help at TRPG

If a client expresses interest in life insurance, or we identify a gap during the planning process, we talk through what matters most: who they’re protecting, what their long-term goals are, and how much flexibility they want. From there, we help evaluate options that align with their complete financial picture, not just their monthly premium. That might mean term life for now, whole life later, or a combination of both. The goal isn’t just coverage; it’s confidence. 

Let’s Make Sense of It Together

Still sorting through what life insurance makes the most sense for you? A quick conversation can go a long way.  Schedule a quick 10-minute call with one of our Wealth Managers to talk through your options and how coverage could fit into your bigger plan. No pressure, just clarity.