Term vs. Whole Life: Which One Actually Fits Your 20s?
You’ve finally decided to break away from employer-provided life insurance and pursue a policy of your own. Your parents are encouraging you to get additional coverage, but now you’re faced with a common question: should you choose term or whole life insurance?
Let’s break it down.
TERM INSURANCE (and we aren’t talking mid-terms…)
Term insurance provides life insurance coverage for a specific period of time—typically 10, 20, or 30 years. As long as you pay your premiums on time, you remain covered for the entire term.
Think of it like renting. Once the term ends, you can choose to renew or purchase a new policy. If something happens to you during that term, your expenses are covered—and the best part is that it’s usually very affordable.
Why the “Young & Healthy” Discount Matters
Many people in their 20s wait until they’re married or buying a home before thinking about life insurance. But here’s the secret: insurance is priced on risk. The younger and healthier you are, the cheaper it is.
Now let’s compare that to whole life insurance.
WHOLE LIFE INSURANCE
Whole life insurance covers you for your entire life, as long as premiums are paid. It is more expensive than term insurance, but it comes with an added benefit—cash value.
A portion of each premium builds cash value over time. Think of it as a life insurance policy combined with a forced savings account. That cash value can later be accessed for various financial needs.
Before choosing whole life, it helps to compare both side by side.
TERM INSURANCE
Duration: Temporary — covers a set term (10, 20, or 30 years)
Monthly Cost: Low — often very affordable for young adults
Cash Value: None — pure insurance
Premium Stability: Fixed for the length of the term
Best For: Income replacement and protecting debts like student loans or a mortgage
WHOLE LIFE INSURANCE
Duration: Permanent — lifetime coverage
Monthly Cost: High — often 10x to 15x more than term
Cash Value: Yes — builds value you can borrow against
Premium Stability: Fixed for life based on your age at purchase
Best For: Estate planning or those who want a forced savings vehicle
How Can The Wilson Legacy Group Help?
Our team helps you build a strong financial foundation while ensuring you’re not overpaying for protection. We walk you through your options and help you choose what actually fits your life today—not just what sounds good on paper.
Ready to explore your options?
Book a complimentary consultation and let’s find the coverage that fits your goals.
Book a Complimentary ConsultationAbout the author: Redith Wilson is Co-Founder of The Wilson Legacy Group, focused on financial education and legacy planning for middle-income families.
Educational content only. Not financial, tax, or legal advice.
