How does term life insurance differ from whole life insurance?

• A. Term life covers a set period with fixed death benefit; whole life includes cash value and lifelong coverage
• B. Term life includes cash value; whole life has a fixed term
• C. Term life provides cash value; whole life has no cash value
• D. Term life is cheaper and never builds cash value; whole life heavy

Answer: (A)

Term life and whole life differ mainly in duration and cash value. Term life provides protection for a defined period and pays a fixed death benefit if you die during that term, but it doesn’t build any cash value. Whole life lasts for your entire life as long as premiums are paid and includes a cash value component that grows over time, which you can borrow against or use later. This combination—term for a set period with a fixed death benefit, and whole life with lifelong coverage plus cash value—is why the best description is that comparison. The other statements mix up which type builds cash value or how long the coverage lasts.