I'm 40 years old, in good health, and considering a life insurance policy for the benefit of my wife and one-year old. Would you rather get a whole life insurance policy, or a term life insurance policy and "invest the difference" in the market?
I'm also contributing to a 401K, a 529 account, and have about $1M in loan liabilities.
My opinion is to first get enough term insurance to cover the income you are trying to protect, for the time period you are trying to protect it. As mentioned before, a convertible term policy would be preferable as it gives you greater flexibility in the future should you need the insurance longer than you initially planned.
The conversation of "invest the difference" should really be one of analyzing your overall budget, and ability to save (not just investing what you would have put into an insurance policy otherwise). You then need to outline your goals for that additional savings and the timeframes for potentially utilizing those savings to have a sense of how much risk you are willing and able to take with your investment choices (and how liquid the funds need to be for access). You also need to be disciplined enough to actually save the funds, establishing a systematic monthly movement of $ from your checking into your savings/investment account is a helpful way for some people to make sure they are taking this step.