Term vs Whole Life Insurance Calculator

Enter your age and coverage needs to compare term life and whole life insurance — including the powerful "buy term and invest the difference" strategy.

Term life insurance is coverage for a specific period (10-30 years) with no cash value — you pay lower premiums and get a death benefit only. Whole life insurance is permanent coverage with a cash value component that grows tax-deferred, but premiums are 5-15x higher than term for the same death benefit.

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Term Life

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Cash Value$0
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Whole Life

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Verdict

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Buy Term and Invest the Difference

Whether you are looking for a term vs whole life insurance estimator, calculate term vs whole life insurance, how to calculate term vs whole life insurance, term vs whole life insurance formula, or free term vs whole life insurance calculator — this free term vs whole life insurance calculator provides accurate estimates to help you plan and make informed financial decisions.

This is the strategy recommended by most fee-only financial advisors. Term life premiums are 5-15x cheaper. If you invest the monthly savings in a low-cost index fund, you'll almost always build more wealth than whole life's cash value — with full control and liquidity.

When Whole Life Makes Sense

Whole life may be appropriate for estate planning (death benefit to pay estate taxes), high-net-worth individuals who have maxed all other tax-advantaged accounts, or people who need permanent coverage for a dependent with lifelong special needs. For 90%+ of families, term is the better choice.

People Also Ask

How much cheaper is term vs whole life?
Term life is typically 5-15x cheaper than whole life for the same death benefit. A healthy 35-year-old might pay $30/month for $500K term coverage vs $300-$400/month for whole life.
What happens when term life expires?
When the term ends, coverage stops. You can renew at a much higher rate, convert to permanent coverage, or let it lapse. If you've been investing the difference, your investment portfolio may replace the need for insurance.
Is whole life a good investment?
For most people, no. Whole life cash value typically returns 1-3% after fees, vs 7-10% historically for stock market index funds. The tax-deferred growth benefit rarely compensates for the massive premium difference.