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What is the difference between whole life insurance and term life insurance?

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1. Term is like paying car insurance..you are covered for the time your payment says....whole life usually has some value at the end of each year. Term is a fraction of the cost....go with term..a lot double talk in the insurance industry.
2. There are a number of differences between the two types of policies. The simplest way of looking at it is that term is like renting and whole life, or permanent, insurance is like owning. Term insurance provides you with typically the lowest priced insurance product because the only accept the risk that you will die before reaching a specified date. If you do die during that time then the insurance company pays the established death benefit. If you out live the policy, you will typically not receive anything back. With whole life insurance, you are paying the insurance company to provide your family with the insurance pay out when you die. Whole life insurance will usually last until at least age 100, regardless of when you begin the policy. There are some variations of whole life which also allow you to finish paying on the policy at a specified age, or after a set time period, but in these cases, the policy lives on even though you are no longer paying for it.
3. Think of term insurance like renting a house. It's a good short term solution, but not a good long term one. It's cheaper than buying a house (buying W/L), but every few years the landlord will bump up the rent (every few years depending on the term, your premiums go up). You also build no equity, so if you move out, you just hand back the keys and say thanks for place to crash for a while (when you cancel term you get nothing back). Eventually the landlord will kick you out (term expires at a certain point) and you have no control over it. Whole Life is like buying a house. Good long term solution for long term needs, but it's a waste if it's a short term thing. While it's a little more expensive in the early years, the price never goes up and after a certain amount of years it's will be paid off and you keep the house (if it's a limited pay policy you pay for X years and then you own the policy, just like paying out a mortgage). Since you own the place, your landlord can never kick you out (most whole life policies don't expire until age 104, or 112) and if you move you get some money back out of it (A Cash value builds, kind of like equity in it) Term is good for short term things like debts, putting the kids through school, etc. If the need is less than 30 years go with term Whole Life is good for long term things like funeral expenses, estate taxes, charitable giving/leaving an estate for the kids, etc that will not go away no matter how old you are. IF the need is longer than 20-30 years go with whole life. Many people have a combination of both. AVOID ANYONE THAT TELLS YOU THERE IS A ONE SIZE FITS ALL APPROACH TO INSURANCE (IE: only buy term, or only buy w/l). They are ignorant and don't understand the difference.
4. Whole life insurance provides lifetime coverage as long as you pay the premiums. It can build cash value inside the policy. Term life insurance is temporary protection for a specific number of years - 10, 15, 20, or 30 years. There is no cash value within the policy. If you outlive the term of your policy the coverage expires.
5. Term Life insurance, This this the purchase of insurance cover for a set amount of time, for instance 30 years.