Whole life insurance is a type of permanent life insurance that provides coverage for the entire lifetime of the insured individual, as long as premiums are paid. In addition to the death benefit payable to beneficiaries upon the insured’s death, whole life insurance also includes a cash value component that accumulates over time. This cash value grows tax-deferred and can be accessed by the policyholder through withdrawals or loans during their lifetime, offering a source of funds for various purposes such as emergencies, supplemental retirement income, or education expenses. Whole life insurance typically has fixed premiums and guarantees a predetermined death benefit, making it a stable and predictable financial tool. However, it is often more expensive than term life insurance due to its lifelong coverage and cash value component.

Term life insurance is a type of life insurance policy that provides coverage for a specific period, or “term,” typically ranging from 5 to 30 years. If the insured person passes away during the term of the policy, the beneficiaries receive a death benefit payout from the insurance company. However, if the insured person outlives the term of the policy, no benefit is paid out, and the coverage typically expires unless renewed. Term life insurance is often chosen for its affordability and simplicity compared to other types of life insurance, such as whole life or universal life insurance.