Difference between Whole and Term Life Insurance
I have always recommended term life insurance mainly because so far it has always been much less expensive for the same death benefit. Lets keep in mind that life insurance is a benefit for your surviving beneficiaries that kicks in after you die. The reason I focus on having the right amount of coverage for as low a price as possible is because sometimes we come upon an illness that prevents us from working or earning any money for months or even years. When you are not earning any money the difference between $35 per month or upwards of $130 per month is significant. If it becomes unaffordable you default on the premiums and you lose the policy.
When you pay for car insurance after 5 or 10 years the insurance company does not refund the premiums. If they did car insurance would be much more expensive. That is one of the reasons for the difference in costs between term and whole life. You are paying, that is right, you are paying for those guarantees such as cash value and the ability to take loans. It is almost always best to buy term and invest the difference or pay down debt, depending on your financial situation.