What is likely to be a reason for the higher cost of whole life insurance as compared to term insurance?

The higher cost of whole life insurance compared to term insurance is primarily due to the cash value accumulation in whole life policies. Whole life insurance is designed to provide lifelong coverage, and part of the premium goes toward building a cash value component that grows over time. This cash value can be borrowed against or withdrawn, which adds a savings component to the policy. The insurer must manage the investment of these cash values, which requires additional resources and carries ongoing costs, contributing to the higher premiums.

In contrast, term insurance focuses solely on providing a death benefit for a specific period without any cash value accumulation. As a result, term policies generally have lower premiums since they are only covering the risk of death during the term without any long-term savings component.