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Whole Life Insurance Calculator

Whole life premium and cash value against buying term and investing the difference.

Your numbers

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Result

Advantage to buying term and investing $226,490
Whole life cash value $149,502
Value if the difference were invested $375,992
Annual premium difference $3,720
Total whole life premiums $126,000
Buying term and investing the $3,720 difference ends up $226,490 ahead after 30 years, at the return assumed here.

An estimating tool, not insurance advice and not a quote. Actual premiums are set by underwriting on factors no calculator sees: claims history, credit and loss data, exact location, construction, contract requirements and the insurer's own appetite. What cover you need is a question for a licensed broker who has looked at your situation. The comparison turns entirely on the investment return assumed, which nobody knows, and on whether the difference actually gets invested rather than spent. Whole life also carries guarantees, tax treatment and estate-planning uses that a side-by-side return comparison ignores, and those can be the whole point for some buyers. The early-year cash value assumption here is illustrative; real policies vary widely.

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Questions

About this calculator

Is whole life a bad investment?

It is not primarily an investment, which is where most arguments about it go wrong. It is permanent cover with a savings component and specific tax and estate uses. Judged purely on return it usually loses to term plus investing; judged on what it is designed for the comparison is different.

Why is early cash value so low?

Because the first years of premium go largely to commission and the cost of insurance. Surrendering in the early years typically returns far less than was paid in.

The formula

compare accumulated cash value against investing the premium difference at the assumed return

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