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Whole life insurance, like term life insurance, provides many important protections and benefits.

We prefer term life insurance because it is a simple product with one purpose: to provide income for your family should you pass away. A term life policy allows you to buy the amount of insurance you actually need and use any money left over to invest or use as you see fit. Get a free term life quote.

On the other hand, whole life insurance is a little more complicated — and premiums are more expensive than term life insurance. That’s because whole life insurance combines an insurance policy and an investment. A whole life insurance policy can pay you dividends like some stocks can, or you can borrow against the policy. Should you pass away before you pay the loan back, this will lower the amount your family receives.

We believe our recommended model — purchasing a term life plan and investing the difference you would pay for a whole life policy — can give you a higher probability of having a successful retirement than purchasing a whole life policy.