Term vs Whole Life Insurance Calculator

About this calculator

Term life insurance provides pure death-benefit coverage for a fixed period (such as 20 or 30 years) at a much lower premium, while whole life insurance combines a death benefit with a savings component (cash value) that grows over the policyholder's lifetime, at a premium that is typically 5 to 15 times higher for the same coverage amount. The cost difference exists because whole life is designed to pay out eventually (since it lasts the insured's whole life) while term life only pays out if death occurs within the covered period, making term far cheaper to underwrite.

Insurance agents and financial planners commonly recommend a strategy known as 'buy term and invest the difference' — buying cheaper term coverage and investing the premium savings in the market — because market returns have historically outpaced the modest, tax-deferred growth rate on whole life cash value, though whole life appeals to buyers who want permanent coverage and forced, guaranteed savings.

This calculator compares total premiums paid for term versus whole life insurance over your chosen period and projects what investing the premium difference could grow to, so you can weigh the true cost of each option.