Last updated: April 5, 2024

What are the differences between term and whole life insurance?

The main difference between term life insurance and whole life insurance is that term offers coverage only for a specific amount of time whereas whole life insurance (a type of permanent life insurance) covers you throughout your life. Here’s a quick look at how they both work:

Term life insurance

  • A type of life insurance that covers you for a set amount of time (e.g. 10, 15, 20, 30 years).
  • You can choose the time length and your policy will automatically renew when the initial term length comes to an end. But your premiums (monthly or annual fees) may increase after you renew. The policy has an expiry date at which time it will end.
  • Some term policies will let you convert to permanent life insurance.

Whole life insurance

  • A type of permanent life insurance that covers you for your entire life.
  • In most cases, your premiums are guaranteed to stay the same forever.
  • Your policy will never expire, and you don’t have to worry about renewals.
  • Some whole life policies even come with a savings component called a cash value.

Can you have both a term and a whole life insurance policy?

Yes, you can. For example, you can get a term policy for your short-term insurance needs like mortgage protection and income replacement while having a whole life policy to cover long-term needs like estate planning and funeral expenses.

When can you switch from term to whole life insurance?

The ideal time to switch policies is when your insurance needs change. Keep in mind, you can only convert your policy until age 75.

Connect with an advisor for more detailed information

Term vs. whole life insurance: What are the benefits?

Term life insurance

  • It’s initially inexpensive.
  • You can buy coverage to suit your needs, anywhere from $50,000 to $25 million.
  • It’s easy to understand.

Whole life insurance

  • Your coverage never expires, regardless of any future health conditions.
  • The cost is guaranteed to never go up.
  • Later in life, it can be less costly than term insurance.
  • It can provide tax-preferred cash value growth opportunities.
  • You can withdraw or borrow from the cash value. But there may be tax implications to doing so.

Term vs. whole life insurance: What are the drawbacks?

Term life insurance

  • Your coverage is temporary. It ends when the policy expires.
  • The cost goes up every time your policy renews.
  • You can’t renew it past age 85.

Whole life insurance

  • It’s initially more expensive than term life insurance.

Term vs. whole life insurance: What’s the application process like?

Term life insurance

Depending on how much coverage you want, you can either apply online or through a Sun Life advisor.

When you apply for term life insurance, you’ll have to answer some medical questions and go through underwriting.

Whole life insurance

Sun Life offers two whole life insurance products: Sun Life Go Guaranteed Life Insurance and SunSpectrum Permanent Life II Insurance.

Sun Life Go Guaranteed Life Insurance

  • You can get a quote and apply online for coverage up to  $25,000.
  • You won’t be asked any medical questions.
  • You won’t have to go through the underwriting process.

SunSpectrum Permanent Life II Insurance

  • You can get a quote and apply through an advisor for coverage up to $25,000,000.
  • You’ll have to answer medical questions.
  • You’ll have to go through underwriting.

Get term or whole life insurance

Not sure what’s right for you?

A Sun Life advisor can help you figure out what type of insurance best meets your financial needs. They can also answer any questions you have.

To find an advisor near you, enter your postal code.

Buy life insurance online

Get a quote and complete the application process online.

  • $25,000 or less: Your coverage starts right away.
  • $50,000 or more: You may get instant temporary insurance up to 90 days while we review your application. Please note that some exclusions apply.