Term life insurance is easy to understand, affordable, and more commonly purchased than whole life. It provides coverage for a specific length of time (this is called a “term”) at a level premium (meaning the price doesn’t change) throughout the life of the policy. This type of life insurance is great for people that need either a small or large amount of coverage at a low cost.
Whole life insurance covers you for life as long as you pay the premium. Some policies include the potential to build up cash value, which is tax deferred, you can be borrowed from it, or you can surrender your policy for the cash value. For these reasons a whole life policy can be more difficult to understand and expensive than a term life policy.