What’s the difference between whole life insurance and term insurance?

Whole life insurance quite literally does just that – it provides you with coverage for your whole life. Crazy enough, under a whole life policy, some companies will even offer you coverage from the minute you sign up until you reach the age of 120 years young. An added bonus of this type of policy is that it builds cash value over time – cash that can be borrowed against and used to pay premiums.

Term life insurance also has a quite literal definition: it provides you with coverage for a term of 10-,15-,20 years and so on. You choose the amount of time you’d like the coverage applied for depending on your need. However, unlike whole life insurance, term insurance does not provide you with any cash value.