What is the difference between term and whole life insurance?

Term life insurance provides coverage for a specific period, such as 10, 20, or 30 years. If you die during that term, your beneficiaries receive the death benefit. If you outlive the policy, coverage ends and you receive nothing. It's generally much cheaper and straightforward, making it popular for covering specific financial obligations like a mortgage or income replacement during working years. Whole life insurance is permanent coverage that lasts your entire life as long as premiums are paid. It includes a cash value component that grows over time on a tax-deferred basis, which you can borrow against or withdraw. Because of this added feature and lifetime coverage, whole life premiums are significantly higher than term policies for the same death benefit.