The biggest decision in life insurance is the type: term or whole (a form of permanent life insurance). They serve different goals, and most families need one far more than the other.
Term life insurance
Coverage for a fixed period, typically 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive the payout. If you outlive it, coverage ends.
- Pros: much cheaper, simple, easy to match to a need (e.g. until the mortgage is paid and the kids are grown).
- Cons: no cash value; coverage ends when the term does.
Whole life insurance
Permanent coverage that lasts your whole life and builds cash value you can borrow against.
- Pros: lifelong coverage, fixed premiums, cash-value growth, useful for estate planning.
- Cons: can cost 5–15× more than term for the same death benefit.
Which is right for you?
For most people with temporary needs, replacing income while raising a family or paying off a mortgage, term is the right answer, and the low cost lets you buy enough coverage.
Whole life makes sense for specific goals: lifelong dependents, estate/tax planning, or a guaranteed legacy, usually after you’ve maxed out other tax-advantaged savings.
A common strategy is “buy term and invest the difference”: get affordable term coverage and put the premium savings into retirement accounts.
The bottom line
Start by sizing your need (see how much life insurance you need), then pick the type that fits. Compare life insurance quotes to see real rates.