faultlinesweekly

The short answer: Term life insurance only pays out if the insured person dies within a fixed period, such as 20 or 30 years, and builds no cash value beyond that — it's pure risk protection with an expiration date. Whole life insurance covers the insured person for their entire life and includes a savings component that accumulates cash value over time. Because whole life guarantees an eventual payout and bundles in an investment feature, it costs significantly more for the same death benefit, often five to fifteen times more, depending on age and health. What you're actually paying for in each type Term life insurance is built entirely around a single bet: the insurer is wagering that the insured person is unlikely to die within the term, and the premium reflects that probability, recalculated based on age, health, and term length. If the insured outlives the term, the policy simply ends with no payout and no refund — the premiums paid were the cost of coverage during that...