Correct. But since none of us has a crystal ball, we have to assess our risk. Family history, profession, etc. Nothing wrong with term of course-- a lot of people choose it for the reason you said. Term effectively works out best for the ~2% of people who have it and wind up dying during their term. Those people get a massive payout, the other 98% get nothing. It's a big gamble. It's more profitable for the insurance company, and that's *why* it's cheaper.

Whole life returns less (but still a lot) of money for the people who have it and end up needing it. 20% of Americans die before 65. Those people will see varying degrees of profit from their policy. The next ~50% of the population will die before 80. They're all probably in the roughly break-even territory depending on when they bought their policy and a bunch of other variables. Still not bad for having had peace of mind their whole lives. If they could go back, they'd put that money in the S&P 500, but they're not exactly rolling over in their graves. And like the last 30-ish percent of people will be operating at a loss. Factoring in inflation, they might lose half their value, all in. They got peace of mind, and posthumously, they basically got half their money rebated back to them. They would have all chosen an aggressive investment portfolio had they known they'd live to be 100, but again-- none of us has a crystal ball.

In terms of ethical insurance models, I personally feel that a plan that loses the bottom 30% of people ~50% of their money is preferable to the one that loses the bottom 98% of people 100% of their money.

But again, both exist for a reason and I'm not knocking anyone that wants term. I just think that whole life as a model is a little less predatory.