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Is term life insurance worth it?

Wondering if life insurance is worth it? Short answer: it is. Term life insurance provides an affordable way to help financially protect your family.

If you’re asking yourself whether life insurance is worth it, the answer is simple. Yes, life insurance is worth it — especially if you have loved ones who rely on you financially.

Life insurance acts as an important financial safety net if you were to pass away suddenly. Term life insurance, in particular, provides coverage at an affordable price during the years your financial dependents need it most.

Learn more about term life insurance, how it works and why it might be an important part of your financial plan.

In this article:

What exactly is term life insurance and how does it work?

Term life insurance is worth it if you’re looking to help ensure financial security for your family at a budget-friendly price. It’s a simple, affordable type of life insurance plan that covers your family for a set period of time, typically 10, 15, 20 or 30 years. You choose a term length that matches the timeframe of your financial responsibilities. For example, until the children are adults or your mortgage is paid off.

Determining which term length you need is actually very easy. You can use an online life insurance calculator to receive a recommendation on a coverage amount and term length that may best fit your financial situation.

In exchange for monthly or yearly premiums paid for the duration of the term length, a life insurance policy provides financial protection to your family. If you were to die within the term length, a payout called a death benefit would be paid to your beneficiary or beneficiaries. The proceeds from the death benefit can be used to help pay for financial needs – those that come with death, such as funeral arrangements and other end-of-life expenses, along with day-to-day bills like the mortgage and child care.

You might be wondering what happens once the term length is over. Well, coverage ends. You don’t get back the premiums paid (similar to car insurance). But that’s the point: to have affordable coverage in place during those pivotal years just in case something happens.

Who needs a term life insurance plan?

If you have loved ones who are financially dependent on you — like partners, children, siblings or parents — then buying life insurance coverage is absolutely worth it. Even if you don’t have financial dependents yet, life insurance can be a valuable solution for making death easier on a family (at least financially.) The payout from a policy can help cover financial obligations like funeral expenses or help pay your outstanding debts, if any. It can be your financial legacy.

A simple way to understand if you need term life insurance is to use an online life insurance calculator. It will take into consideration your age, income, family structure and more to provide you with a personalized recommendation. A life insurance calculator will also tell you if you don’t need coverage at all.

In short, term life insurance is a worthwhile (and affordable) way to help financially protect your loved ones. A policy’s death benefit could help:

For a small amount of money, you can support your family’s financial well-being even after your death — and if you need another incentive to become a life insurance policyholder, remember that the death benefit your chosen beneficiaries will receive is typically tax-free.

Term life insurance is a worthwhile (and affordable) way to help financially protect your loved ones.

What does term life insurance cost?

The cost of a term life insurance policy will depend on your age, gender and health as well as the term length and coverage amount you choose. The following are sample quotes for a 20-year Haven Term policy, issued by MassMutual, for people in excellent health.

Term life insurance quotes

Age Gender Coverage amount
$250,000 $500,000 $750,000 $1 Million
25 Male $16.99 $22.48 $30.72 $38.69
25 Female $14.58 $19.03 $25.55 $32.07
30 Male $17.43 $22.48 $30.72 $38.96
30 Female $14.99 $19.46 $26.19 $32.92
35 Male $18.06 $23.34 $32.01 $40.67
35 Female $15.37 $20.32 $27.29 $34.65
40 Male $24.12 $32.38 $45.57 $58.77
40 Female $19.91 $28.07 $39.11 $50.15
45 Male $38.16 $56.07 $81.10 $106.13
45 Female $29.64 $43.15 $61.72 $80.30
Source: Term life insurance quotes for the medically underwritten Haven Term policy issued by MassMutual. Coverage is available up to $3 million.
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What are the alternatives to term life insurance?

An alternative to term life insurance is permanent life insurance — a common type of permanent coverage being whole life insurance. Here’s the biggest difference between term and permanent life insurance: Term insurance covers you for a predetermined number of years (the “term” length), and a permanent life insurance policy covers you for the rest of your life.

With term life insurance, you decide how long you anticipate needing the coverage — until the mortgage is paid off, until the kids graduate from college or until you retire — and select a term that corresponds to that length of time. If you die before the coverage term ends, the death benefit is paid to your beneficiaries to help cover financial obligations.

With a whole life insurance policy, you pay for lifetime coverage. The policy also includes a cash value feature that accumulates over time. Taking out loans from the cash value built up in your life insurance policy can be a way to help pay expenses such as retirement costs or your children’s college costs. (t’s important to know that accessing your policy’s cash value, through borrowing or partial surrenders, reduces its cash value and the death benefit. It also increases the chance the policy will lapse, and may result in a tax liability if the policy terminates before your death. And, some whole life insurance policies (those that are “participating”) have the potential to earn dividends. However, dividends are not guaranteed.

The other big difference between the two types of life insurance is price. Whole life insurance is significantly more expensive than term; in fact, the annual premiums are often five to 10 times more expensive for the same dollar amount of coverage, which can be cost-prohibitive for many. Term life insurance is simpler-to-manage, more affordable and a solid option for many families. You can even apply for term life insurance online, in a matter of minutes.

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Term versus permanent life insurance: Which is right for you?

When it comes to shopping for life insurance, the decision on whether to get a term or permanent policy really comes down to your personal preferences and budget for life insurance.

Term life insurance might be a good choice if you:

Permanent life insurance might be a good choice if you:

Life insurance is more affordable than you think

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When might term life insurance not be worth it?

Term life insurance is a great product, but so is a well-made life jacket, and not everyone needs one of those. You might not need life insurance if you identify with any of the following:

For many people, though, term life insurance is worth it.

Thinking about life insurance? Why you may want to act now

“Buying life insurance” can sometimes feel like one of those to-dos on par with rolling over an old 401(k) or cleaning leaves out of your gutters. It’s something you know needs to be done eventually, but the perceived time and expense involved may make you feel like there’s never a “right” time to do it.

Fortunately, it’s easier than ever to buy a term life insurance policy thanks to modern technology (and we’ve already established that coverage can be affordable). Buying life insurance no longer requires you to find a fax machine, scan documents, or print out pages of information. Now, you can apply online for term life insurance and find out instantly if you’re approved. If approved, in some instances you could even start your coverage right away.

Six steps to buying affordable life insurance online

Step 1: Use a life insurance calculator and get a quote

Not sure how much life insurance you need? The best way to get a general idea is to toy around with a life insurance calculator. By entering details like your age, income, overall health, and family status, you can find out how much term life insurance coverage is suggested for your family and what that policy will cost. Start with our online life insurance calculator.

Life insurance needs aren't one-size-fits-all.

Calculate your needs

Step 2: Easily apply online

Once you’ve decided how much coverage you need, it’s time to get covered. With Haven Life, you can apply online for a term life insurance policy — from your phone or laptop and from wherever is convenient for you. If approved, you can start coverage immediately.

Step 3: Take a life insurance medical exam (if needed)

In many cases, a physical exam will be needed to finalize coverage on a medically underwritten term life insurance policy, which is usually the most affordable type of life insurance coverage.

With Haven Life’s InstantTerm process, some applicants may qualify to skip the medical exam. That’s because, in partnership with MassMutual, Haven Life has built technology that can analyze application information in real-time. If the insurer has a good enough understanding of your health and risk, the formality of an exam may not be needed. Once an application is submitted, you will be notified whether or not an exam is needed. Keep in mind that it’s very important to be honest when completing a life insurance application, as issuing the policy or payment of the benefits  depends on the truthfulness of answers provided.

For those who don’t want to take a medical exam, there are 100% no-exam term life insurance options. These types of policies often cost more because of the lack of understanding the life insurance company has about your health. But they are a good option if you know yourself and that you won’t complete the medical exam. Here’s an example of the price of no medical exam life insurance options:

Step 4: Name primary and contingent beneficiaries

When you get down to it, the entire goal of life insurance is to take care of your loved ones, which is why the selection of your beneficiaries is a crucial part of the application process.You will need to designate primary beneficiaries, and it’s a good idea to name a contingent beneficiary as well.

Peace of mind: It’s worth it

Those nagging to-dos can drag you down. Getting “buy term life insurance” crossed off your list is worth it for peace of mind. And unlike, say, renovating your kitchen, purchasing term life insurance is an affordable way to provide a financial safety net for your loved ones for the coverage term you select, whether it be a decade, or number of decades, if you were to die during that time.

So … is term life insurance worth it? While there’s no monetary value on peace of mind, for many, knowing you’ve put financial protection in place for your family is everything. And you may find that you can provide this protection for little more than the cost of your monthly music or TV streaming service. Term life insurance may not have a big monthly impact on your budget (which is a good thing) but it can have a big impact on feeling settled and confident that you have protected your family.

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The answer to that question is easy (which is exactly how Haven Life makes applying for term life insurance)

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About Louis Wilson

Louis Wilson is a freelance writer whose work has appeared in a wide array of publications, both online and in print. He often writes about travel, sports, popular culture, men’s fashion and grooming, and more. He lives in Austin, Texas, where he has developed an unbridled passion for breakfast tacos, with his wife and two children.

Read more by Louis Wilson

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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