Is Term Life Insurance Worth It?

Written by Jason Fisher

There are too many times where people fight over which is best, term life insurance or whole life insurance. It’s been long debated, so today we’ll talk about a question from the other point of view, “Is Term Life Insurance Worth It?

The quick answer: sometimes not.

Like any other type of insurance product, there are situations where it may be appropriate and situations where it really isn’t.

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Is Term Life Insurance Worth ItTo answer the question “Is Term Life Insurance Worth It?”, we have to know its purpose, in what situations its applicable, and if it’s even an option for some. Keep reading for details on whether or not term life insurance is really worth it or not.  There is also decreasing term life insurance available if that is something you are interested in. If you are concerned because you have health issues such someone looking for life insurance with kidney disease and you’re wondering if you can qualify for affordable high risk life insurance, we can certainly answer questions and help you obtain the coverage you deserve. So whether you’re looking for a small amount of coverage or you need million dollar life insurance rates; call us today.

Life insurance can be one of the most important investments that you’ll ever make. It’s one the few ways that you can ensure that your family has the money that they need, even if something tragic were to happen to you. Regardless of which type of plan that you’re going to buy, it’s important that your family has the protection that they need.

Is Term Life Insurance Worth It?

Debate after debate has been sung from the hills about whether term or whole life is the best option. We’re not going to debate that today. In fact, we’re going to discuss both sides of the question “Is Term Life Insurance Worth It?”, because there are two sides.

Life insurance is one of the most important purchases that you’ll ever make for your loved ones. It’s vital that you get the perfect insurance plan for you and your loved ones. It’s important that you compare all of the different pros and cons of a term insurance plan before you pick a plan for you.


In personal finance, one rule of thumb which has since become a cliche talks about a penny saved being a penny earned. For the most whole-hearted and frugal, spending even a single extra dollar on anything which won’t either make you money or save you money might seem like a total waste.

Those who are most against term life insurance from strictly the product standpoint argue it is, quite literally, gambling. Like all insurance products, you either use it or lose it. So in order to win, you have to die.

Obviously, it’s not quite that simple, but a fact of the matter when it comes to life insurance is that only 1% of term policies ever pay out.

Only 1 % of term policies ever pay out.

It’s true. The other 99% of all policies never pay a dollar to the payer or beneficiary. So what happens to those policies? They are:

  • Lapsed
  • Foreclosed
  • Replaced
  • Outlived

If you look at it from a raw data side, any person who buys term life insurance has a 99% chance of losing their premiums.

While this is a valid point against buying term life insurance, the 1% of people that actually receive the payout would have been in drastic financial struggle without the life insurance coverage. Just because there is a low chance that you’ll ever receive a payout from the plan shouldn’t keep you from getting the coverage that your family deserves. If you want to take a chance that you won’t fall in that 1%, you can save money on the premiums.


The other side of the fence would argue the grass is much greener. They would argue that term life insurance is worth it because it’s the foundation of a financially stable portfolio.

Unlike most other types of insurance, like car , home or health, life insurance is not even required. But not everyone ever uses their car or homeowner’s insurance either, so what does it matter?

Term life insurance, as long as one can qualify for great rates, is one of the cheaper insurance products available. Not only that, it doesn’t replace a tangible product, but rather designates a large sum of cash for whoever needs it most.

Even more, term life insurance magnifies your dollars. Whereas a car insurance plan (which can cost more than life insurance by a long shot) only replaces the current market value of the vehicle lost, life insurance payouts turn pennies into dollars.

Who Is Right?

Realistically, both.

In short, term life insurance serves one purpose: replacement of human capital.

By nature, because it is insurance, you hope you never have to use it, but it’s safe to have it just in case. You can never replace a human being, but you can soften the blow to those who depend on them by replacing the value of money they would have provided in the years to come.

However, for some, it may not be worth it because the cost could outweigh the potential benefits, especially if one cannot qualify for affordable rates.

If you don’t think that term life insurance coverage is worth it, you can look at some of the other life insurance options, like a whole life plan. As you can probably guess from the name, whole life policies never expire, and you’ll have life insurance These policies are an excellent option for anyone that doesn’t want to worry about losing coverage in the future. The permanent coverage is going to come at a much higher premium cost. If you’re looking for the cheapest life insurance policy, a term plan is going to be the best choice for you.

How Much Life Insurance do you need?

Regardless of which kind of life insurance plan that you buy, it’s vital that you purchase enough coverage. Not having enough life insurance is one of the worst mistakes that you could ever make. Not having enough life insurance is one of the worst mistakes that you could ever make for your loved ones. If something tragic were to happen to you, and your life insurance plan was too small, your family would end up with additional bills and expenses that they wouldn’t have the money to cover. There are several key factors that you will need to add up when you’re determining your life insurance needs.

The first number that you should crunch is your debts and unpaid bills. The primary goal of your life insurance is to give your family the money that they need. If something tragic were to happen to you, all of your debts are going straight to them. Losing someone that they love is never going to be easy, but being responsible for all of their debts is going to make the whole situation that much worse. Make sure that your life insurance policy is large enough to cover any bills that you would leave behind.

The next number that you should look at is your annual income. The secondary goal of your life insurance is to replace your paycheck if you were to pass away. If you’re one of the main income earners in your home, they would suffer financially if something were to happen to you, but that’s where your life insurance policy comes in.

Working with an Independent Insurance Agent

One of the best ways to ensure that you’re getting the lowest rates available is to compare dozens and dozens of quotes before you decide which one is best for you. Every insurance company is different, and you’ll get drastically differing rates depending on which company that you contact.

Instead of wasting hours and hours on the phone with different companies, let one of our independent insurance agents do all of the hard work for you. Unlike traditional agents that only work with one single company, we work with dozens and dozens of highly rated companies across the nation. Our independent agents can bring all of the best quotes directly to you.

If you are curious to have an expert opinion on whether or not you need insurance, give us a call and we’ll give you our honest opinion.

We know that shopping for life insurance is never a fun task. There are several different factors that you will need to consider. Nobody wants to think about his or her own death, but not planning for the inevitable is one of the worst mistakes that you could make.

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