Term vs. Whole Life Insurance Calculator
See what "buying term and investing the difference" could be worth.
Open the Interactive CalculatorHow It's Calculated
"Buy term, invest the difference" takes the monthly savings between a cheaper term policy and a pricier whole life policy and invests it. Invested Value compounds that monthly difference over the term at your expected return.
Example
Example: a $500,000, 20-year term policy costing $35/month versus a whole life policy costing $300/month — investing the $265/month difference at 7% annually grows to roughly $138,000 by the end of the term, on top of having identical death-benefit coverage the whole time.
Frequently Asked Questions
Is whole life insurance ever the better choice?
It can suit permanent needs like estate planning, a dependent who will always need support, or people who want the forced-savings discipline and guaranteed cash value — but it costs far more than term coverage for the same death benefit.
What happens after my term policy expires?
Term coverage ends at the end of the term unless renewed (usually at a much higher rate) or converted to permanent coverage. Many people plan to be self-insured by then through savings and investments, like the ones modeled here.