{"id":15681,"date":"2021-07-13T10:23:18","date_gmt":"2021-07-13T10:23:18","guid":{"rendered":"https:\/\/www.lemonade.com\/blog\/?post_type=article&#038;p=15681"},"modified":"2025-01-23T18:57:25","modified_gmt":"2025-01-23T18:57:25","slug":"term-vs-whole-life","status":"publish","type":"article","link":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/","title":{"rendered":"Term vs. Whole Life Insurance: Which Is Right For You?"},"content":{"rendered":"\n<p>Life insurance helps provide financial protection for your loved ones after you\u2019re no longer around. That\u2019s serious stuff. It\u2019s a bit more consequential than picking between a pumpkin-spice latte or a decaf cappuccino..<\/p>\n\n\n\n<p>We\u2019ll lay out some of the pros and cons of both <a href=\"https:\/\/www.lemonade.com\/insuropedia\/dictionary\/term-life-insurance\/\">term <\/a>and <a href=\"https:\/\/www.lemonade.com\/insuropedia\/dictionary\/whole-life-insurance\/\">whole life<\/a>, so that you can feel confident in making an educated decision.<\/p>\n\n\n<div id=\"article-cta-block_60ed67466f983\" class=\"article-cta\">\n    <p class=\"article-cta-text\">Apply for term life insurance with Lemonade, starting at $8 a month <\/p>\n    <a class=\"article-cta-button content_article_cta\" data-track=\"content_article.cta.clicked\" href=\"https:\/\/www.lemonade.com\/life\/1\">get free quote<\/a>\n    <style type=\"text\/css\">\n        #article-cta-block_60ed67466f983 {\n            height: 80px;\n            width: 100%;\n            max-width: 700px;\n            display: flex;\n            flex-flow: row;\n            align-items: center;\n            justify-content: space-around;\n            background: #F7F7F7;\n            border: 1px solid #ECECEC;\n            border-radius: 5px;\n            padding: 15px 15px 15px 30px!important;\n            cursor: pointer;\n        }\n\n        .article-cta-text {\n            width: 100%;\n            max-width: 450px;\n            display: flex;\n            font: 700 20px\/28px \"Lato\", \"Helvetica Neue\", Arial, sans-serif!important;\n            margin: 25px 0 25px!important;\n            text-align: left;\n        }\n\n        .article-cta-button {\n            display: flex;\n            align-items: center;\n            justify-content: center;\n            height: 47px;\n            width: 212px;\n            padding: 0px 25px;\n            box-shadow: 0 4px 8px 0 rgb(255 0 131 \/ 20%);\n            border-radius: 5px;\n            margin-left: 40px;\n            font: 700 1rem \"Lato\",\"Helvetica Neue\",Arial,sans-serif;\n            position: relative;\n            text-decoration: none;\n            text-transform: uppercase;\n            overflow: hidden;\n            white-space: nowrap;\n            text-overflow: ellipsis;\n            user-select: none;\n            transition: background-color .3s,color .3s,border-color .3s;\n            background-color: #ff0083;\n            color: #fff!important;\n            border: 0;\n            box-shadow: 0 10px 40px -10px rgb(255 0 131 \/ 50%);\n            transform: translateY(0);\n            transition: all .2s,transform .5s;\n        }\n\n        .article-cta-button:hover {\n            background-color: #dc0073;\n            text-decoration: none!important;\n        }\n\n        \/* mobile tweaks *\/\n        @media only screen and (max-width: 768px){\n            #article-cta-block_60ed67466f983 {\n                font: 700 22px\/27px \"Lato\", \"Helvetica Neue\", Arial, sans-serif;\n                min-height: 220px;\n                height: 100%;\n                padding: 15px 15% 31px;\n                width: 100%;\n                display: flex;\n                flex-flow: column;\n                align-items: center;\n                justify-content: center;\n                padding: 15px 15px 15px 15px!important;\n            }\n\n            .article-cta-text {\n                display: flex;\n                align-items: center;\n                width: 100%;\n                max-width: 230px;\n                text-align: center;\n                margin-top: 0;\n            }\n\n            .article-cta-button {\n                margin-left: 0;\n            }\n        }\n        \n\n    <\/style>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>What is term life insurance?<\/strong><\/h3>\n\n\n\n<p>The principal advantage of term life insurance is that it is substantially less expensive and simpler than whole life insurance.<\/p>\n\n\n\n<p>How does it work? Well, first you pick a period of time\u2014a term. If you should pass away before the end of the term\u2014as long as you\u2019ve kept up with your payments\u2014your insurer issues the payout to the <a href=\"https:\/\/www.lemonade.com\/insuropedia\/dictionary\/primary-beneficiary\/\">beneficiaries<\/a> you chose. That payment is also referred to as the \u2018<a href=\"https:\/\/www.lemonade.com\/insuropedia\/dictionary\/death-benefit\/\">death benefit<\/a>.\u2019<\/p>\n\n\n\n<p>The big thing to keep in mind is that term life covers you only for the term of the policy. If you have a ten-year term life insurance policy, and you live another <em>eleven<\/em> years, there\u2019s no payout. In this way, life insurance companies are able to keep term life insurance affordable, since (yay!) most people outlive their policies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What is whole life insurance?&nbsp;<\/strong><\/h3>\n\n\n\n<p>The main bonus of whole life insurance, a type of permanent life insurance, is that it covers you for your entire life.&nbsp;<\/p>\n\n\n\n<p>Life insurance companies will\u2014with some exceptions\u2014pay out the whole life policy\u2019s death benefit when you pass, whether in five years or fifty years. Whole life plans also have other pluses, including that the insurance company invests a portion of your premiums in a tax-deferred cash-value component that bears interest at a rate determined by the insurer, so your policy builds cash value over time.<\/p>\n\n\n\n<p>One of the big negatives of whole life insurance is that, depending on your age, health, and other particulars, the premiums could be five, ten, or even <em>fifteen<\/em> times higher than for term life insurance.&nbsp;<\/p>\n\n\n\n<p>In addition, the cash value a whole life policy accrues is based on a guaranteed interest rate set by your insurer. But you could also consider purchasing a more affordable <a href=\"https:\/\/www.lemonade.com\/life\"><em>term<\/em> life policy<\/a>, and then investing the money you\u2019re saving in things like treasury bonds or index funds.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"795\" height=\"438\" src=\"https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/money.jpeg\" alt=\"\" class=\"wp-image-15682\" srcset=\"https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/money.jpeg 795w, https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/money-300x165.jpeg 300w, https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/money-768x423.jpeg 768w\" sizes=\"auto, (max-width: 795px) 100vw, 795px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Is term or whole life insurance right for me?&nbsp;<\/strong><\/h3>\n\n\n\n<p>Choosing between term life insurance or a form of permanent life insurance is a very personal decision. Your best bet is to educate yourself\u2014like you are right now!\u2014and then take some time to mull over the best option for your own circumstances. Check out our <a href=\"https:\/\/www.lemonade.com\/blog\/how-does-life-insurance-work\">ultimate guide to life insurance<\/a> to take an even deeper dive into the particulars.<\/p>\n\n\n\n<p>If you think that you can grow your money better than an insurance company can, then one option is to buy an affordable term policy and use the cash you save to invest. As we mentioned, you don\u2019t have to be a financial wizard\u2014it could be as easy as putting money in an index fund, and forgetting about it for three decades.<\/p>\n\n\n\n<p>Some financial gurus have a mantra, in fact: \u2018Buy term, and invest the difference.\u2019 We\u2019re a little biased, but we couldn\u2019t agree more.<\/p>\n\n\n\n<div id=\"post-cta-block_6792910757d75\" class=\"post-cta wp-block-button lmnd-cta\">\n    <a class=\"wp-block-button__link tc\" href=\"https:\/\/www.lemonade.com\/life\/1\" data-track=\"blog.cta.clicked\" data-position=\"body\">APPLY NOW<\/a>\n<\/div>\n<style>\n    .lmnd-cta {\n    margin: auto !important;\n    padding-top: 10px!important;\n    padding-bottom: 10px;\n    text-align: center;\n    }\n<\/style>","protected":false},"featured_media":15684,"template":"","class_list":["post-15681","article","type-article","status-publish","has-post-thumbnail","post-hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Term vs. Whole Life Insurance: Which Is Right For You? - Lemonade Blog<\/title>\n<meta name=\"robots\" content=\"noindex,nofollow\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Term vs. Whole Life Insurance: Which Is Right For You? - Lemonade Blog\" \/>\n<meta property=\"og:description\" content=\"Life insurance helps provide financial protection for your loved ones after you\u2019re no longer around. That\u2019s serious stuff. It\u2019s a bit more consequential than picking between a pumpkin-spice latte or a decaf cappuccino.. We\u2019ll lay out some of the pros and cons of both term and whole life, so that you can feel confident in [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/\" \/>\n<meta property=\"og:site_name\" content=\"Lemonade Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Lemonade\/\" \/>\n<meta property=\"article:modified_time\" content=\"2025-01-23T18:57:25+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/nativelife2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"667\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@lemonade_inc\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/term-vs-whole-life\\\/\",\"url\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/term-vs-whole-life\\\/\",\"name\":\"Term vs. Whole Life Insurance: Which Is Right For You? - Lemonade Blog\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/term-vs-whole-life\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/term-vs-whole-life\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/wp-content\\\/uploads\\\/2021\\\/07\\\/nativelife2.jpg\",\"datePublished\":\"2021-07-13T10:23:18+00:00\",\"dateModified\":\"2025-01-23T18:57:25+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/term-vs-whole-life\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/term-vs-whole-life\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/term-vs-whole-life\\\/#primaryimage\",\"url\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/wp-content\\\/uploads\\\/2021\\\/07\\\/nativelife2.jpg\",\"contentUrl\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/wp-content\\\/uploads\\\/2021\\\/07\\\/nativelife2.jpg\",\"width\":1000,\"height\":667},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/term-vs-whole-life\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Term vs. Whole Life Insurance: Which Is Right For You?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/#website\",\"url\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/\",\"name\":\"Lemonade Blog\",\"description\":\"Talking innovation, purpose, user experience and insurance\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.lemonade.com\\\/blog\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Term vs. Whole Life Insurance: Which Is Right For You? - Lemonade Blog","robots":{"index,nofollow":"noindex,nofollow"},"canonical":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/","og_locale":"en_US","og_type":"article","og_title":"Term vs. Whole Life Insurance: Which Is Right For You? - Lemonade Blog","og_description":"Life insurance helps provide financial protection for your loved ones after you\u2019re no longer around. That\u2019s serious stuff. It\u2019s a bit more consequential than picking between a pumpkin-spice latte or a decaf cappuccino.. We\u2019ll lay out some of the pros and cons of both term and whole life, so that you can feel confident in [&hellip;]","og_url":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/","og_site_name":"Lemonade Blog","article_publisher":"https:\/\/www.facebook.com\/Lemonade\/","article_modified_time":"2025-01-23T18:57:25+00:00","og_image":[{"width":1000,"height":667,"url":"https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/nativelife2.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_site":"@lemonade_inc","twitter_misc":{"Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/","url":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/","name":"Term vs. Whole Life Insurance: Which Is Right For You? - Lemonade Blog","isPartOf":{"@id":"https:\/\/www.lemonade.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/#primaryimage"},"image":{"@id":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/#primaryimage"},"thumbnailUrl":"https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/nativelife2.jpg","datePublished":"2021-07-13T10:23:18+00:00","dateModified":"2025-01-23T18:57:25+00:00","breadcrumb":{"@id":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/#primaryimage","url":"https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/nativelife2.jpg","contentUrl":"https:\/\/www.lemonade.com\/blog\/wp-content\/uploads\/2021\/07\/nativelife2.jpg","width":1000,"height":667},{"@type":"BreadcrumbList","@id":"https:\/\/www.lemonade.com\/blog\/term-vs-whole-life\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.lemonade.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Term vs. Whole Life Insurance: Which Is Right For You?"}]},{"@type":"WebSite","@id":"https:\/\/www.lemonade.com\/blog\/#website","url":"https:\/\/www.lemonade.com\/blog\/","name":"Lemonade Blog","description":"Talking innovation, purpose, user experience and insurance","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.lemonade.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/www.lemonade.com\/blog\/wp-json\/wp\/v2\/article\/15681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lemonade.com\/blog\/wp-json\/wp\/v2\/article"}],"about":[{"href":"https:\/\/www.lemonade.com\/blog\/wp-json\/wp\/v2\/types\/article"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lemonade.com\/blog\/wp-json\/wp\/v2\/media\/15684"}],"wp:attachment":[{"href":"https:\/\/www.lemonade.com\/blog\/wp-json\/wp\/v2\/media?parent=15681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}