Is Term Life Insurance Cheaper Than Whole Life Insurance? 
As a general rule , yes . If you are comparing equivalent face amounts -LRB- death benefit -RRB- on both a term policy basis and a permanent/whole life life insurance policy basis one would expect the term policy to cost less . This lower cost for term life insurance reflects that these types of life insurance policies ; 1 -RRB- present less risk because they are in effect for only the designated period of the policy 's term , 2 -RRB- no permanently paid up units of life insurance risk are being purchased through this policy to present a long term risk after premium payments cease , 3 -RRB- the policy does not build up any cash value that can be returned to the policyholder or taken out as a loan , 4 -RRB- investment proceeds from the policyholder 's premiums are retained by the life insurance company . These are among the primary factors explaining why term life insurance is less expensive the permanent life insurance -LRB- whole or universal -RRB- . 