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Term Life vs. Whole Life Insurance: Differences and How To Choose

Term life insurance is cheaper than whole life insurance, but it covers you for only a set number of years.
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1.

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Ethos

  • A quick online application process, with no medical exam required.
  • Coverage for term life insurance ranges from $200,000 to $2 million.
  • Draws fewer than the expected number of complaints for a company of its size.
  • Excellent rating on Trustpilot, Google and A+ from BBB.
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on Ethos's website

2.

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Ladder

  • Get $100,000 to $3 million in coverage without a medical exam.
  • A mobile-friendly, fully digital experience.
  • Issues most term life insurance policies within minutes.
  • Adjust your coverage amount at any time.
See Details
on Ladder's website

3.

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Fabric

  • Simple, 10-minute online application process.
  • Offers coverage up to $1.5M without a medical exam and up to $3M with one.
  • Access a portion of the policy’s payout early if diagnosed with a terminal illness.
  • The mobile app has extra features, like a free tool for creating a will.
See Details
on Fabric's website

Term life vs. whole life: Overview

To better understand the difference between term life and whole life, here’s a quick rundown on how each type of coverage works.

Term life insurance

The way term life insurance works is simple: It covers you for a fixed period of time, such as 10, 20 or 30 years, and pays out if you die during the term. If you outlive the term and your coverage ends, your beneficiaries don’t receive any money. Most policies are a type of level term life; the death benefit and insurance premiums are guaranteed to stay the same throughout the term. A decreasing term life policy is slightly different, and less common. The death benefit gets smaller over the length of the term while the premiums stay the same.

Whole life insurance

Whole life insurance is the most common type of permanent life insurance and costs more than term life. This is because most policies offer coverage that matures late in life—at 90, 100 or 120 years old, in some cases. Whole life insurance also has a cash value component. A portion of your premium goes toward the cash value, which can grow over time. Once you’ve built up enough cash value, you can borrow against it or surrender the policy for cash.
insurance-product-card-logo

Ethos

  • A quick online application process, with no medical exam required.
  • Coverage for term life insurance ranges from $200,000 to $2 million.
  • Draws fewer than the expected number of complaints for a company of its size.
  • Excellent rating on Trustpilot, Google and A+ from BBB.
See Details
on Ethos's website