Enter one term policy and one whole life policy with the same coverage. We compare total premiums against whole life's cash value growth and the "buy term, invest the difference" strategy.
⚠ Estimates only, not financial advice — see the note below the results for details. Unlike auto or home insurance, life insurance premiums aren't state-specific, so national averages apply everywhere in the US.
Level premium for a fixed term, no cash value — coverage ends if you outlive the term.
Higher level premium, lifelong coverage, builds tax-deferred cash value over time.
Each line already includes every adjustment above it — this isn't a list to add up. Compare using the bottom line only.
Estimates only, not financial advice. Both policies are assumed to provide the same death benefit throughout, so this comparison isolates the cost of the coverage itself, not the payout. Whole life's cash value is modeled as the premium stream compounding at the internal rate of return (IRR) you enter — the rate insurers themselves use to describe long-run cash value performance — not a smooth year-by-year growth rate. Real whole life cash value grows far more slowly in the first 10-15 years (a policy surrendered in its first few years can result in a loss) and accelerates later, so this model is most accurate for evaluating the full horizon, not an early surrender. Term's credit assumes the monthly premium difference is actually invested every month at the rate you enter — the whole comparison depends on that discipline.
Term vs Whole Life Insurance takes one term policy and one whole life policy for the same coverage amount and runs each through four stages to estimate the true cost of each, over your chosen horizon.
Whole life's premium is dramatically higher for the same death benefit — a large part of it funds the cash value account and covers the cost of permanent (rather than temporary) coverage.
Simply each monthly premium multiplied by 12 and by your comparison horizon in years — the raw, unadjusted cost of each policy.
Whole life credits its own cash value, grown at the IRR you enter. Term credits the future value of investing the monthly premium difference — what you'd have left over each month by choosing the cheaper policy — at the investment return rate you enter. Splitting this into two halves of your horizon shows how both credits accelerate over time as compounding takes hold.
No. Term vs Whole Life Insurance gives a directional estimate to help you think through a decision, not a substitute for a licensed insurance agent or financial advisor. Actual policy illustrations, guarantees, and riders vary enormously by insurer and underwriting class.
$53/month for term reflects the 2026 average rate for a healthy 40-year-old nonsmoker buying a 20-year, $500,000 term policy (blending typical rates of about $47/month for women and $59/month for men across major carriers). $320/month for whole life reflects the 2026 average for the same coverage amount and age (blending about $303/month for women and $337/month for men). Life insurance premiums, unlike auto or home insurance, aren't priced by state — these national averages apply regardless of where you live.
Whole life insurers publish a "dividend interest rate" (several major mutual insurers reported 5.75%-6.60% for 2026) — but that figure is an input to the dividend formula, not your policy's actual rate of return. Independent analyses of real policy illustrations consistently show the actual internal rate of return on cash value lands around 4%-4.5% after 20 years, and often below 3% in the first 10 years, since a large share of early premiums covers insurance costs and commissions rather than building cash value.
Because term is far cheaper for the same coverage, the "extra" money you'd otherwise pay for whole life can be invested instead. At realistic long-run market returns (a diversified portfolio has historically outperformed 4%-4.5% by a meaningful margin), the invested difference usually grows to more than whole life's cash value would be worth. Whole life can come out ahead if you'd realistically invest at a low rate (or not at all) and your policy performs at the higher end of realistic cash value returns — try lowering the investment return field to see when the balance tips.
Yes — this tool only compares the financial cost. Whole life offers guarantees (fixed premium and death benefit for life), forced savings discipline, and estate-planning or tax advantages some people value regardless of the raw numbers. Term life is temporary and becomes unaffordable or unavailable at older ages, which matters if you need coverage past the term's end. These qualitative tradeoffs are real but aren't something this tool tries to price.
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Rate data: 2026