What is one key difference between term life insurance and whole life insurance?

Term life insurance and whole life insurance serve different purposes and have distinct features. One key difference is that term life insurance typically has a lower initial premium compared to whole life insurance.

Term life insurance is designed to provide coverage for a specific period, such as 10, 20, or 30 years, and it pays a death benefit to the beneficiaries if the insured dies during that term. Since it does not build any cash value and is effectively a pure protection policy, its premiums are generally more affordable, especially for younger individuals or those in good health.

Whole life insurance, on the other hand, is a permanent life insurance policy that provides coverage for the insured’s lifetime, as long as the premiums are paid. It also includes a savings component that accumulates cash value over time, which is not a feature of term life insurance. This accumulated cash value can be borrowed against or withdrawn, adding to the overall cost of whole life premiums.

The other options do not accurately reflect the essential differences: whole life policies do not expire after a certain age as long as premiums are maintained, they also offer cash value accumulation, and term life does not provide coverage for a limited time in the conventional sense—it's based on the selected term length, which can