The short version
| Term life | Permanent life (whole / universal) | |
|---|---|---|
| How long it lasts | A set period, such as 10, 20 or 30 years | For life, if premiums are paid as required |
| Cost for the same death benefit | Lower | Significantly higher |
| Cash value | None | Yes, according to the contract; some values are not guaranteed |
| Common uses | Mortgage, raising children, income replacement | Estate taxes, legacy, final expenses, business planning |
| Flexibility | May be renewable or convertible | Universal life offers premium and investment flexibility |
When term usually fits
When the need ends: the mortgage gets paid, children become independent, retirement savings build up. Term gives the most coverage per dollar during those years.
When permanent usually fits
When the need lasts a lifetime: taxes on investments or a cottage at death, a gift to children or charity, or a dependant who will always need support.
Combining both
Many families hold a larger term policy for the high-need years and a smaller permanent policy for lifelong needs. A conversion option on a term policy can also keep the door open.
Start with my life insurance planning checklist, then request a needs review.
This article is general information, not advice for your specific situation. Policy wording and insurer rules determine coverage.