Coverage · Term & Whole Life
Cover the years that matter, and the ones after.
Term insurance is the cheapest way to carry a large death benefit through the years a household is most exposed. Whole life is what you buy when the need does not end.
What term life insurance does.
A term policy pays a death benefit if the insured dies inside a stated number of years. Ten, fifteen, twenty, twenty-five and thirty year terms are the ones carriers write most often. The premium is level for the whole term, and at the end of it the policy either expires or continues at a much higher annually renewable rate.
Nothing accumulates inside it. There is no cash value, no loan provision and no surrender value. The entire premium buys the death benefit and the carrier’s expenses, which is exactly why it costs a fraction of permanent coverage at the same face amount.
Average monthly premiums for $500,000 of twenty-year term, on 2026 published figures, run about $38 for a man aged 30, $59 at 40, $137 at 50 and $395 at 60. Rates roughly double between 40 and 50 and nearly triple between 50 and 60. Nothing about the coverage improves with age.
The parts that matter
What separates a good term policy from a cheap one.
Conversion rights
The provision that matters most and gets discussed least. A convertible policy can be exchanged for permanent coverage with the same carrier without new medical underwriting. Carriers set their own windows and some close well before the term ends.
Term length
Match it to the exposure. Count the years until the youngest dependent is independent and the years left on the mortgage, then take the longer of the two. Layering a twenty-year policy over a ten-year one often costs less than one long policy.
Riders
Waiver of premium keeps a policy in force if you become disabled. An accelerated death benefit releases part of the face amount on a terminal diagnosis. A child rider covers dependents cheaply. Return of premium rarely earns its cost.
Face amount bands
Pricing is not linear. Carriers band their rates, so $500,000 frequently costs only slightly more than $400,000. Always ask for the quote at the next band up.
What whole life insurance does.
A whole life policy covers the insured for life, with a level premium and a guaranteed death benefit. Part of each premium goes into a cash value account that grows at a guaranteed rate, and mutual carriers may credit dividends on top of that.
The cash value belongs to the policy owner, reachable by loan or surrender, and it is what makes a level premium possible at advanced ages. It is also why the early years look poor: front-loaded charges come out first, so the cash value in years one to three is usually well below the premiums paid.
That structure makes permanent insurance a poor fit for anybody who may want the premium back within a few years, and a reasonable one for a need that does not end. The two are compared side by side in term or whole life: what the difference actually costs.
Choosing between them
Most households we write end up with both.
The temporary need and the permanent need are different problems, and one product does not solve both well.
- Term covers the exposure. A household needing $1,000,000 of protection for the eighteen years until the youngest child finishes college is not choosing between two products. It is choosing between the right amount of coverage and the wrong amount, because a permanent premium on a million dollars prices most families out of the coverage they need.
- Permanent covers what is left behind. Final expenses, an estate you intend to pass on, an obligation that outlives the mortgage. That need does not end, so a product that ends is the wrong instrument.
- The order matters. Buying a small permanent policy first and leaving the mortgage uncovered is the common mistake. The large temporary exposure is the one that bankrupts a household and also the cheapest one to insure.
Which one should you buy?
Work from what has to be replaced rather than from a multiple of income. Count the debt that survives you, the number of years the household still needs the income, the cost of the work that stops, and then subtract the coverage already in force and the savings already there.
Most households arrive at a large term policy sized to the years of exposure and a smaller permanent policy sized to what they mean to leave. The arithmetic is set out in how much life insurance you actually need.
Does a term policy pay if I outlive it?
No. A level term policy that reaches the end of its term without a claim pays nothing, and that is what makes it inexpensive. Return of premium riders exist and refund the premiums at the end of the term, but the extra cost usually exceeds what the difference would have earned elsewhere.
The conversion right is the more useful hedge. It lets you keep coverage permanently, at the rate class you qualified for years earlier, without a new exam.
Can I have more than one policy?
Yes, and layering is often the cheaper answer. Carriers care about total coverage in force relative to income and net worth rather than the number of contracts. Two policies of different lengths, each sized to its own exposure, usually cost less over time than one policy sized to the longest need.
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