Term vs. Whole Life Calculator
The classic "buy term and invest the difference" question, run by the numbers. See what the gap between a cheap term premium and an expensive whole life premium could grow into if you invested it instead.
The invested difference, year by year
How this works
Term and whole life policies of the same size buy you the same death benefit, but at very different prices. "Buy term and invest the difference" is the idea that you purchase the cheaper term policy, then take the money you didn't spend on whole life and invest it every month.
This calculator computes the monthly gap between your two premiums, then grows that gap as a recurring monthly investment at the return you choose for the number of years you set. The headline figure is the future value of that invested difference. We also show what you would have paid in whole-life premiums over the same stretch, so you can see both sides of the trade.
Term vs. whole life FAQs
Sometimes. Whole life can make sense for estate planning on a taxable estate, for a lifelong dependent (such as a child with special needs) who will always need support, or for business succession and liquidity needs. For the typical family that mainly needs coverage while kids are young and a mortgage is being paid down, term plus disciplined investing usually comes out far ahead.
Term only covers you for a set period and builds no cash value, so nearly all of your premium pays for pure death-benefit coverage. Whole life lasts your entire life, bundles a savings component, and carries higher commissions and fees — so the same death benefit can cost many times more each month.
Be conservative. A broad stock-index portfolio has historically returned roughly 7% a year over long periods, but that's never guaranteed and any given decade can be much weaker. Modeling 5–7% keeps the comparison honest rather than optimistic.
Ideally the need has ended by then — the mortgage is paid, the kids are grown, and your invested difference has become a real nest egg. If you still need coverage you can buy a new term policy, but the whole premise of buying term is that the need is usually temporary.