Key Difference: Term life insurance protects the issuer against unforeseeable events for a limited time. Whole life insurance are policies that last the duration of the life of issuer and pays out when they die.

Insurance is considered as an important investment for some, while others believe it to be a useless waste of money. However, many people look to insurance incase their want to protect themselves from an unforeseeable events or to protect their families after their death. There are two main types of insurances that can be opted for term life insurance or whole life insurance. These are completely different from each other and before investing one should always look and read all about the insurance before purchasing a plan.

Term life insurance is the most basic and common insurance policy that is issued. This policy protects the issuer against unforeseeable events for a limited time – i.e. 10, 15, 20 years or so on. If the insurer dies or sustains injuries during the activation of the policy, the company pays out the insurance payout. However, if they do not make any claims during the term of the policy, the policy usually expires. These policies are usually cheaper because they last only a small time. 

Whole life insurance includes various different policies under it, which are referred to as cash-value, or permanent, insurance. Term life insurance plays dual roles, where in addition to providing benefits in terms of death, it also doubles as a savings component or cash value that is reinvested and tax deferred. The money is accumulated and reinvested throughout the life of the policy and can be cashed sometime in the future. These often are long term policies and are considered as permanent. However, one can exit a policy but will be subject to penalties. The policies are often cheaper if the issuer is young, but get more costly as the age increases.

Comparison between Term Life and Whole Life Insurance:

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