How Does Whole Life Compare to Term Life Insurance?

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The difference between term life and whole life insurance can be compared to the difference between renting and owning a home. 

Both renting and owning provide you and your family with the security of a shelter; likewise, both term and whole life insurance offer protection. 

When you pay your rent, you are simply paying for the roof over your head. Similarly, when you pay for your term life insurance, you are only purchasing survivor benefit protection. But neither your apartment nor your term insurance policy will build any equity for you. 

If you own a home, each time you make a mortgage payment, you are building equity you can use as a cash source. The same is true of a whole life policy. Each payment you make builds equity in the form of the policy’s cash value, which you can use as a living benefit.

Guarantees of a group whole life policy:

  • Cost: The cost is based on your age, gender, and health at the time your policy is issued and is guaranteed not to increase. You won’t see any changes in the costs as you get older, or if your health changes.
  • Cash value: A group whole life policy includes information that tells you the guaranteed cash value increase for each year. The cash value is equal to the policy’s face value when the insured reaches a certain age. The cash value’s growth has a fixed interest rate. 
  • Benefit: As long as you pay the cost of the policy and no borrowing occurs, the original life insurance amount will be paid to your beneficiaries. 

Group whole life insurance can provide long-term coverage and flexibility to help you prepare for life’s uncertainties. Ask yourself these questions:

  • What will happen if I live too long?
  • What will happen if I die too early?
  • Can I protect myself, family, or business from the adverse financial consequences of these occurrences?

The good news is you can. You can purchase a whole life policy and be confident in the protection it offers. It will be there over the long haul for those you care about most.

Interested in group whole life or want to learn more? Contact our retirement team at

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