Is term life insurance worth it? Here's what experts say (2024)

One of the most common types of life insurance is term life insurance, a temporary kind of policy that covers you for a set period of time, usually five to 30 years.

This can be helpful if you want to be sure your loved ones can cover your remaining mortgage balance or the cost of your child's college tuition if you die earlier than expected. And compared to whole life insurance — which covers you for your entire life, with no set time limit — it's much more affordable, too.

"Term life insurance is super cheap," says Robert Slayton, CEO of Robert Slayton and Associates, an independent insurance agency. "Think of it as renting a policy for a period of time."

So should you consider buying term life insurance? Or would whole life insurance or another type of insurance policy be best? Below, we'll break down what experts recommend.

If you're in the market for life insurance then start by getting a free price quote here.

When is term life insurance worth it?

Term life insurance is smart when you have debts or a time-boxed expense — something you want to ensure your dependents can afford should you pass away. This might include a mortgage or credit card balance, for example, or something like school tuition or car payments.

"it can be a great option if you are seeking coverage for a set period of time and don't want to tie up your cash flow," says Sahang-Hee Hahn, head of strategy and planning at life insurance company Haven Life. "Often, people choose term life insurance when they are raising children, taking on mortgage debt, paying off student loans, building a business, saving for college, or building generational wealth.

Term life insurance can also be worth it if you simply want financial support for your dependents but are on a limited budget.

"Term insurance is great for lower-income individuals who just want to ensure that they have some coverage to support their families if they die prematurely," says Samantha Chow, global leader of life, annuities, and benefits at Capgemini, a business consultancy. "It gives peace of mind to the policyholder that their family will not be caught in a bind."

Get a free term life insurance price estimate here to learn more.

When is term life insurance not worth it?

Term life insurance probably isn't worth the costs if you don't have any significant debts to pass on to your loved ones or you don't have dependents or a spouse that you'd leave in a bind by passing away.

"If you do not have anyone who relies on your income, term life insurance may not be necessary," says Evan Tunis, president of Florida Healthcare Insurance. "This is because there would be no one to financially support in case of your death. Also, if you have no outstanding debts or financial obligations, the payout from term life insurance may not be needed."

You also won't want to invest in term life insurance if you want a policy you can borrow against or one that has a cash value. These perks are limited to permanent life insurance policies, like whole or universal life insurance.

"Whole life typically grows in cash value and dividends throughout the years you have it," Slayton says. "When you retire, you can take a loan against the policy and use it as part of your tax-free retirement plan."

Finally, term life insurance isn't the right fit if you want long-term coverage. As Slayton succinctly puts it, "Don't choose term life if you need a policy that will be there until you die."

Shop around for your policy

If you do opt for a term life insurance policy, make sure to shop around for your provider. Premiums can vary widely from one insurer to the next, so comparing at least a few different companies can help you get the best term life insurance price. If you need help, reach out to an independent insurance agent in your area. They can point you toward policies and providers that fit your needs. Get started with a free price quote from Haven Life here today or use the table below to compare some of the best term life insurance companies available now.