Term $250/yr vs Whole Life $2,500/yr Over 25 Years at 7%
Compare term life at $250/year against whole life at $2,500/year by investing the $2,250 difference at 7% over 25 years.
How to use this tool
- Get quotes for comparable term and whole life policies with the same death benefit.
- Enter both annual premiums and the comparison period (usually the term length).
- Set a realistic investment return for the premium difference.
- Compare the invested difference against the whole life policy's projected cash value.
See how the $2,250 annual savings from choosing term over whole life insurance compounds at 7% over a 25-year period.
Frequently asked questions
- Is term or whole life better?
- For most families seeking the largest death benefit per dollar, term wins. Whole life makes sense if you want guaranteed lifelong coverage, a forced-savings vehicle, or specific estate-planning benefits — and can afford the much higher premium.
- Does this include the whole life policy's cash value?
- No. It shows what the premium difference could grow to in a separate investment. To complete the comparison, weigh this figure against the policy's projected (non-guaranteed) cash value.
- What return rate should I assume?
- Use a realistic long-run figure for a diversified portfolio — many planners model 5% to 7% after inflation. Lower assumptions narrow the gap between the two approaches.