What Is The Difference With Term And Whole Life Insurance? 
Term Life Insurance is a temporary policy with very few moving parts . It has no cash value ; pays no dividends ; can not be paid off early ; and when the term is up , it goes way up in price , or else the policy simply ends . As such , it also usually costs less per thousand dollars of coverage than Whole Life costs . Whole Life accumulates cash value that can be borrowed from , used to pay the policy premium in later years , or collected if the policy is surrendered . It may pay periodic dividends . Whole Life policy premiums can be paid over one 's lifetime , or in one single premium , or over a set number of years . The biggest difference between Term and Whole Life is that Whole Life is permanent insurance that will last your `` whole '' lifetime . With these features , Whole Life usually has a higher premium than Term Life , although it is possible that if you keep buying new Term policies throughout your life , the cumulative premium of Whole Life may be lower than the sum total of all the Term policies , especially if your health declined over the years . 