Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Which statement correctly contrasts term life insurance with whole life insurance?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Term insurance provides pure death protection for a specified period with no cash value; whole life provides lifetime protection at a level premium and accumulates cash value. Term is cheaper initially because it covers a limited period and builds no savings element, while whole life's higher premium funds the cash value and the level lifetime premium.
Why the other options are wrong
- B) The opposite is true: term builds no cash value; whole life does.
- C) Term is generally cheaper than whole life at the same age because it is temporary and builds no cash value.
- D) Term premiums usually rise at renewal (or stay level only for the term period), while whole life premiums are level for life.
Memory hook
Term = rent: cheap, temporary, no equity. Whole life = own: pricey, permanent, builds a cash account.