Term or whole life? See the real numbers
Same age, same coverage amount, side by side — including what the premium difference could be worth if invested instead.
$325 / year
No cash value. Coverage ends when the term expires.
$3,575 / year
Permanent coverage. Est. $35,750 cash value by year 20.
You'd pay $3,250/year less for term than whole life. If you invested that difference instead at 7% annually for 20 years:
- Whole-life paid
- Term paid
- Difference invested
Illustrative only — assumes the full premium difference is invested every month and ignores taxes, fees, and market volatility. Whole life cash value grows more predictably and isn't exposed to market risk, which is the trade-off this comparison simplifies. Read the full disclaimer.
Trust & methodology
Last reviewed: July 23, 2026
This tool provides an illustrative cost comparison for planning purposes — not a quote from any insurer.
How to use this calculator
Enter age and coverage amount
The same inputs are used to price both the term and whole life estimates.
Pick a term length
10, 20, or 30 years — whole life is compared over the same time horizon.
Set an expected investment return
Used for the "invest the difference" projection, not the insurance pricing itself.
Compare the two cards
See monthly cost, estimated whole life cash value, and the projected value of investing the premium gap.
Inputs used
- Age
- Coverage amount
- Term length
- Self-reported health rating
- Tobacco use
- Expected investment return
Formula basis
- Term premium: same age-banded mortality formula used in the premium estimator
- Whole life premium ≈ term premium × 11 (a widely-cited rule-of-thumb multiplier for permanent vs. term coverage at comparable ages)
- Estimated cash value ≈ 50% of whole life premiums paid over the comparison term (a conservative illustrative assumption — actual cash value schedules vary by carrier and policy design)
- Invested-difference projection: future value of a monthly annuity equal to the premium gap, compounded at the entered return rate
Assumptions and limits
- The whole-life multiplier and cash-value assumption are illustrative rules of thumb, not a specific carrier's policy illustration
- Ignores taxes, fees, policy loans, and dividend variability that affect real whole life cash value
- The invested-difference projection assumes disciplined, consistent monthly investing at a constant return — real returns vary year to year
Frequently asked questions
Term life only pays out if you die during the term. Whole life is permanent and builds cash value you (or your beneficiaries) can eventually access, so insurers price it to cover that lifelong guarantee — typically 10-15x the cost of an equivalent term policy at younger ages.
It's a popular strategy: buy the cheaper term policy and invest what you would have spent on whole life premiums instead. Whether it beats whole life depends heavily on your actual investment returns and discipline over the full term.
It can suit people who want permanent coverage, a forced-savings vehicle, or estate-planning benefits like tax-advantaged cash value growth. It's a smaller-but-real use case compared to the larger term-buying population.