The Term vs. Whole Life Insurance Debate: Which is Better?

If you’re looking for life insurance, you may be thrown when you’re asked if you want term or whole life. Those who haven’t had life insurance before or had to deal with it in any way may not realize that there are different types. People often ask which type is better, but there is no standard answer. When looking for life insurance quotes, Naperville has many options, so be sure to find the one that best fits you.

For quite some time, the only real option was whole life insurance. Term insurance did exist, but most people bought whole life insurance because it would provide for their family and was a good way of subsidizing their retirement.

Starting in the early 80s, people began to invest their money in the stock market instead of in life insurance. They would see returns of ten percent or more right away, plus their loved ones could cash the stocks out if necessary. It was more of a risk, but people saw it as the better option. They would still buy life insurance, but they would get the cheaper term policies instead of the lifelong option.

The Differences

The primary difference, of course, is that whole life insurance is a policy that you carry for your entire life unless you cancel it, while a term policy is set for a number of years and expires at the end of that term. But there are more differences than just this.

Here are a few of the key areas you need to consider:


Whole life policies almost always have living benefits, meaning you can withdraw some of the money from the policy early if you need to cover medical costs. Some term policies do this, but most do not. These benefits are usually added to the policy through a rider, and these riders can be written in a number of ways.

Whole life policies also have a cash accumulation that grows every year, this cash can be accessed tax free if handled properly. Term policies don’t have this, either—they simply pay out if you die. They’ll provide for your family, which is a relief, but they won’t do much else.

The Cost

Whole life policies are almost always more expensive because they usually pay out more. Term policies don’t cost as much, though, and are often more affordable for those on a limited income.

The Winner

This really depends on your needs. For some, a whole life policy is the way to go. For others, term is the best. For many people, a combination of whole life and term life policies can solve many of their insurance needs.

Now matter what your situation, the best thing to do is to learn all you can about both types of policies so you can see which fits your needs. Decide what protects your family the best.

Ready to find out which type of policy is best for your family? Contact us today to start the process!

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