I have been wondering if whole life insurance makes sense. Does it ever beat buy term and invest the rest?

After doing the maths, the clear answer is No.

To arrive to this conclusion, I looked at two common term and whole life plans, summed up the investment returns and deducted the premiums paid, to arrive to a total benefit.

Let’s compare the plans with as similar parameters as possible.

Term Plan: MINDEF Group Insurance with Life cover : $300,000 death coverage with Critical Illness (CI) rider of $250,000. Start age of 30, ending at 70. Male.

Age CI rider monthly cost Main cover monthly cost Annual cost
31 $15 $12 $328
32 $15 $12 $328
33 $15 $12 $328
34 $15 $12 $328
35 $15 $12 $328
36 $25 $12 $445
37 $25 $12 $445
38 $25 $12 $445
39 $25 $12 $445
40 $25 $12 $445
41 $25 $12 $445
42 $25 $12 $445
43 $25 $12 $445
44 $25 $12 $445
45 $25 $12 $445
46 $69 $12 $973
47 $69 $12 $973
48 $69 $12 $973
49 $69 $12 $973
50 $69 $12 $973
51 $105 $12 $1,408
52 $105 $12 $1,408
53 $105 $12 $1,408
54 $105 $12 $1,408
55 $105 $12 $1,408
56 $145 $12 $1,888
57 $145 $12 $1,888
58 $145 $12 $1,888
59 $145 $12 $1,888
60 $145 $12 $1,888
61 $202 $12 $2,569
62 $202 $12 $2,569
63 $202 $12 $2,569
64 $202 $12 $2,569
65 $202 $12 $2,569
66 $263 $176 $5,267
67 $294 $200 $5,926
68 $329 $242 $6,843
69 $368 $287 $7,858
70 $412 $318 $8,763
Total premiums paid: Up to 61 $40,266
Up to 70 $74,923

Now let’s look at a whole life plan, without naming it. Mostly the same parameters, but with a $3,717 premium, payable for only

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