Term Life vs. Whole Life Insurance

4 min read

Term vs. Whole Life insurance – father hugging kids

When researching what kind of life insurance to buy, one of your first questions may be: “What’s the difference between Term Life and Whole Life?” Very likely, your next question is: “Which one is right for me?"

It’s important to understand the difference between these two types of life insurance. Each brings something different to the table.

What is Term Life insurance?

Term Life insurance is a popular choice for financially protecting families for only a specific period of time, known as a “term.” Our Family Plan term life policy, for example, can last for 10, 20 or 30 years, depending on what you select.

When choosing Term Life insurance, consider your age, financial obligations and how long you think you would need to have coverage. Perhaps you have young children and want protection from now through their college years, so a 20 year term policy might make sense. Or maybe, you and your spouse just purchased a home and have a 30 year mortgage and you want your spouse to be able to keep the house, should something happen to you. In that case, a 30 year term may be appropriate.

Many people buy Term Life insurance to get more protection at a lower cost. That’s because Term generally costs less than Whole Life, as coverage is limited to a specific period of time.

A 20-year, $250,000 Term Life policy through Gerber Life can cost as little as $15/month.¹ At the end of the term, the policy could be renewed for a limited amount of time or it could be converted into a Whole Life policy.

What is Whole Life insurance?

Whole Life insurance provides coverage for the entire life of the person insured, as long as premiums are paid. It builds cash value over time, which Term Life policies do not.

The “cash value” of your policy is something that grows over time. It refers to the small amount of your monthly premium payment that the insurance provider sets aside. As the amount accumulates over time, it becomes the cash value of your policy, which you could borrow against in case you had need for ready cash.²

Should you ever decide to cancel your policy, you would receive the available cash value that has accumulated over the life of the policy. The longer you own the policy, the more cash value it builds.

What is the Gerber Life Insurance Family Plan?

Our Family Plan gives you the option to customize a life insurance solution that's right for you. You can choose a Family Plan Term or Family Plan Whole life policy, with the option to include your spouse and/or kids all on one plan.

Choose the policy that’s right for you

Quick Guide to Term and Whole Life Insurance

See which one fits you better

Term Life Insurance

Budget-friendly coverage for 10, 20 or 30 years

man in glasses "I want my kids to have money for college if something happens"

"I just need it while we pay off our mortgage" Young woman with curly hair

Smiling young woman with blond hair "I need something that works with a tight budget"

Whole Life Insurance

Can last a lifetime and builds cash value

"I'd like a policy I can borrow money from²" Smiling woman

man in a suit "I want to leave my kids something extra even if I live to 95"

"I'd like money back if I ever cancel my policy" Woman with her hair tied in a ponytail

When weighing Term Life insurance vs. Whole Life insurance, it may boil down to two things: how long you think you’ll need coverage, and how much you’re ready, willing and able to pay for it.

If you’re just starting out in your career or just starting a family, Term Life can be a relatively affordable way to help give your family financial security during the vital years they’re most dependent on you. With Whole Life insurance, you can have coverage for your whole life, assuming premiums are paid of course. A whole life policy will also accumulate cash value over time which can be accessed if needed, but whole life has a higher cost in comparison to Term.

Whether you decide that Term Life or Whole Life is right for you, Gerber Life has a policy to meet your needs and make it easy to get coverage. With both our Family Plan Term or Whole life policies, coverage is dependent on answers to a few health questions and there’s no medical exam necessary in most cases.³

How to apply for a policy

Start by requesting your free Family Plan life insurance quote. You'll be able to compare Term and Whole life quotes to decide what works for you and then apply in just minutes, either online or by phone.

For more information on Term Life insurance vs. Whole Life insurance, call 866-503-4480

¹For a healthy 30-year-old female paid by automatic monthly deduction from a checking or savings account. Higher rates may apply if payment is made through other methods.

²Policy loan interest rate is 8%. Loans may impact cash value and death benefits.

³A medical exam is required for applicants age 55+ who apply for more than $100,000 in coverage or for anyone applying for more than $1,000,000 in coverage. When you apply, you’ll need to answer several questions about your health, and we may take your medical history into consideration.

Looking for insurance for your entire family?

With our Family Plan, you can get Term Life or Whole Life coverage for yourself with the option to add coverage for your spouse and/or children, all on one policy.

Learn more