Term vs whole life: "buy term and invest the difference," examined honestly

This is the oldest argument in personal finance, and the honest answer is "it depends" — but the default for most people is term.

The case for term

It's a fraction of the cost, so you can buy enough coverage during the years you actually need a lot of it, and invest the money you save in an RRSP or TFSA. For a temporary need, term matched to that need is efficient and simple.

The case for permanent

It never expires, builds cash value, and has estate and tax-planning uses — funding a Capital Dividend Account for incorporated owners, equalising an estate, covering a lifelong dependant, or a guaranteed legacy. For a permanent need, permanent insurance can be the right tool.

Where whole life gets oversold

As an "investment" for ordinary savers who haven't maxed their registered accounts. The internal returns are modest and the embedded costs are high; for most people, term plus a maxed TFSA/RRSP wins. If someone pitches whole life as your main investment before your registered room is full, be skeptical.

How to decide

Is the need temporary or permanent? Have you used your registered room? Do you have an estate or tax reason permanent insurance uniquely solves? Answer those before the product conversation.