Life insurance is a highly competitive business, in which the sales force depends almost entirely on commissions. Insurance companies pay fat commissions to their agents for selling whole-life policies -- perhaps 80 percent of your first year's premium is a commission -- and the premiums for these polices are often five times that of term. By contrast, the typical commission to the agent who sells a term policy is about 10 percent.

Small wonder then that agents push whole-life policies as if their livelihoods depend on it. If whole-life policies were beneficial to consumers, our story would end here. But the fact is, the vast majority of those who need insurance should buy term.

Today, the annual premium on a $500,000 term policy for a healthy, nonsmoking 40-year-old male might be about $500. The same policy for a healthy woman, aged 30, might cost about $260 annually.

And, while not long ago you couldn't buy term policies with level premiums for periods of more than 10 or 15 years, today you can easily find 20- and 30-year term policies.

Agents will argue that whole-life policies are superior because you can keep them the rest of your life and build up cash in them tax-free, which can then be borrowed. That's true enough, but they don't tell you about the high fees and commissions built into whole life, as well as surrender charges (if you want to cancel the policy) that often leave you with little or no cash value five and even 10 or 15 years after you took out the policy.

The tax-free buildup of cash just isn't that powerful anymore, given the proliferation of IRAs, 401(k)s and other tax-advantaged savings vehicles that have tiny commissions, much higher yields, and complete portability.

So stick with term, and do your investing elsewhere.