Term vs Whole Life Insurance Calculator
Compare buying term cover and investing the premium difference with the cash value of a whole life policy.
Quick answer
Term vs whole life compares investing the premium difference (whole life premium - term premium) at an assumed return with the whole life policy's cash value at the end of the period. It also finds the break-even return.
Term vs Whole Life Insurance Calculator
Use the length of the term policy.
Per year, after fees and tax.
From the policy illustration.
Total Term Premiums
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Total Whole Life Premiums
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Invested Difference at End
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Whole Life Cash Value
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Term + Invest vs. Whole Life
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Break-even Investment Return
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Annual Premium per 1,000 of Cover
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Year-by-Year Invested Difference
| Year | Term paid (₹) | Whole life paid (₹) | Invested (₹) | Balance (₹) |
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Assumptions & method
- Annual difference D = whole life premium − term premium, invested at the start of each year (annuity-due).
- Balance after n years = D × ((1 + r)^n − 1) ÷ r × (1 + r), where r is the annual return. At r = 0 it is D × n.
- Comparison = invested balance − whole life cash value at the end of the same period. Positive favours term + invest.
- Break-even return is the r at which the invested balance equals the cash value (searched between −50% and +100%).
- Both policies are assumed to pay the same cover during the period, with level premiums. Lifetime cover after the term, dividends, loans, guarantees, surrender charges, fees and taxes are not modelled; policies vary.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
Term insurance plus investing vs. whole life
Term insurance pays out only if the insured dies within a fixed period and costs much less than whole life, which also builds a cash value. The classic comparison asks what happens if you buy term and invest the premium you save. Each year the difference between the two premiums goes into an investment that grows at the return you assume. At the end of the period, you compare that balance with the cash value shown in the whole life illustration. The calculator also finds the return the investment would need to match the policy. It cannot value lifetime cover, guarantees or policy features, and real policies differ widely.