Term vs Whole Life Insurance Calculator
Whole life costs many times more than term. This shows what happens if you buy term and invest the difference instead.
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Learn moreWhy term usually wins
Term insurance buys a large death benefit cheaply for a set period — ideal while you have a mortgage and dependents. Whole life bundles insurance with a low-return savings account at a steep premium. For most families, buying term and investing the difference builds far more wealth.
How it’s calculated & sources
We invest the annual premium gap (whole life − term) at your assumed return for the full period and show the resulting side fund alongside total premiums paid for each policy.
Benchmark: the “buy term and invest the difference” side fund — it commonly exceeds whole-life cash value, which grows at low guaranteed rates.
Results update as you type and are general estimates, not personalized financial, tax, medical or legal advice. Verify with a professional.
Worked example
If term costs $600/year and whole life $6,000, investing the $5,400 difference at 7% for 20 years grows to about $237,000 — usually well above the policy’s cash value.
Frequently asked questions
Is whole life ever worth it?
For specific needs — estate planning, lifelong dependents, or maxed-out tax-advantaged accounts — permanent insurance can fit. For pure protection, term plus investing usually wins.
What return should I use?
A diversified long-run estimate (~6–8% nominal). Lower it to be conservative; the comparison still favors term at most realistic rates.