How does whole life insurance differ from term insurance in terms of cost?

Whole life insurance is designed to provide lifelong coverage and includes both a death benefit and a cash value component that accumulates over time. This accumulation of cash value is a key feature that distinguishes whole life insurance from term life insurance, which typically covers the insured for a specific period without building cash value.

The premiums for whole life insurance are generally much higher than those for term insurance. This higher cost is justified by the policy's benefits—specifically, the cash value that builds over time, which the policyholder can borrow against or withdraw, and the permanent coverage it provides, as it does not expire as long as premiums are paid. Therefore, stating that whole life insurance has higher premiums that build cash value accurately captures these essential differences in cost and functionality compared to term insurance, which only provides coverage for a limited duration and does not accumulate cash value.