Whole life agents will tell you cash value is the magic. Term advocates say "buy term, invest the difference." Both have a math answer. Slide the inputs below and watch the curves cross — or not.
★ SIDE BY SIDE ★
Same $500,000 coverage
TERM LIFE
$30/mo
Coverage for 20-30 years
Premium FIXED for full term
ZERO cash value
Renewable / convertible to whole
Dies if you outlive the term
Annual cost$360
WHOLE LIFE
$425/mo
Coverage for LIFE (100+)
Premium fixed forever
Builds cash value (~4% growth)
Tax-sheltered cash growth
Loan against cash value possible
Annual cost$5,100
WHOLE COSTS14.2× MOREfor the same death benefit
★ CHART · 30-YEAR CUMULATIVE PAID ★
Where the money goes
Whole life paid · $153,000 Whole cash value · $132,737 Term paid · $10,800 BTID portfolio · $481,889
★ THE VERDICT (FOR YOU) ★
At 7.0% return
PURE TERM$10,800Total paid · zero residual
BTID STRATEGY$481,889Term + invested difference
WHOLE LIFE CASH$132,737Whole policy cash value
At 7.0% return, "buy term + invest the difference" leaves you with $481,889 after 30 years vs whole life's $132,737. The math favors term in this scenario. Whole life wins for: forced savings discipline, estate planning, lifelong coverage need.
★ WHO BUYS WHICH ★
The 80/20 rule
★ TERM (80% OF CANADIANS)
You have temporary needs (mortgage, kids growing up)
You're budget-conscious — want max coverage per $
You'll invest the difference yourself
You expect to be self-insured by retirement
★ WHOLE (20% OF CANADIANS)
You have a lifelong dependant (special needs child)
You'll have a taxable estate (cottage, business)
You've maxed RRSP + TFSA + need more tax shelter
You won't self-discipline to invest the difference