If you ask various financial and insurance professionals this question, you’ll probably find that they disagree considerably on the answer. That’s because it’s largely an “apples to oranges” comparison. Each type of policy has advantages and disadvantages, so which one is best depends on the needs of the client.
Even though the premiums for both products are much higher than those for a standard term policy, a major advantage of whole life is that it provides protection for the rest of your life. In addition, potential dividends from whole life policies can build cash value quickly and eventually add up to more than the face value of the policy.
With a return of premium term life insurance policy, you’ll get your money back at the end of the term, with no interest. Keep this in mind: If you factor in inflation over 20 years (or longer), the money you’ll get back at the end of the term will have less buying power than the same amount does today.