What is the main difference between term life insurance and whole life insurance?

The main difference between term life insurance and whole life insurance is that whole life insurance provides coverage for the insured for their entire lifetime, as long as the premiums are paid, while term life insurance only provides coverage for a specified period of time, such as 10, 20, or 30 years. This fundamental characteristic of whole life insurance is what distinguishes it from term policies, which are designed to offer temporary protection.

Whole life insurance also typically includes a savings component that accumulates cash value over time, which can be borrowed against or withdrawn. However, this feature does not negate the fact that the primary distinction lies in the duration of coverage provided by each type of policy. Term policies do not build cash value; their benefits are only available upon the insured's death during the term. Hence, the clarity in understanding the permanence of whole life insurance coverage is essential for making informed decisions about life insurance needs.