Do you Really Need Life Insurance—Pros and Cons

You are here: Home » MoneyTalk » Additional Topics » Do you Really Need Life Insurance—Pros and Cons

Life insurance is insurance that protects loved ones in case something happens to a member of their family. This is especially true if the person who passes was the sole—or one of the major—breadwinners of a family. Many Americans may be curious to know if they need life insurance. Nobody really needs to have life insurance—as it isn’t required by law. But it is recommended that most individuals with families do.

Knowing the pros and cons of having life insurance can help a person determine whether they need to purchase life insurance. The pros and cons of life insurance vary, and it is important to weigh out both before choosing to opt in for life insurance and then choosing a policy.

Is Life Insurance Right for You?

There are a few things to consider in order to figure out if life insurance is right for you. The main reason that people get life insurance is to provide financial safety for any of their dependents, in case they unexpectedly pass away. Most people consider life insurance if:

  • They are the sole breadwinner in a family.
  • Have several dependents—especially younger ones.
  • Want to leave loved ones with some type of inheritance.
  • In some cases, people get life insurance to pass on or borrow money tax free (depends on the policy).
  • They want to make small payments every month to secure a large amount.

What Kinds of Life Insurance Are There

Generally there are two main kinds of life insurance policies out there:

1.    Term Life Insurance

Term life insurance is the most common type of life insurance for Americans. It is the more affordable of the two life insurance policies, and the premiums typically stay the same throughout the course of coverage. Term life—like the name suggests—has coverage for a certain amount of years. This range is usually from ten to thirty years.

Term life insurance is best for young families who would want coverage for a certain amount of time. For those looking for the most cost-effective type of life insurance, term life insurance may be the way to go.

2.    Whole Life Insurance

Whole life insurance—also known as permanent life insurance—is insurance that provides coverage for the policy holder’s entire life. So as long as the premiums are paid, the insurance will last until the policy holder passes. Whole life insurance is more expensive than its counterpart. The premiums of the policy tend to stay the same, but may change throughout the life of the policy holder.

For those who want coverage for their entire lives—despite the age of their family—and don’t mind the extra cost, whole life insurance may be the way to go.

The Pros and the Cons of Each Type of Life Insurance

There are pros and cons to life insurance. Since there are two major types of life insurance, it may be beneficial to understand the pros and cons of each kind. Here are the pros and cons of both term life insurance and whole life insurance:

 Pros of Term Life Insurance
Cons of Term Life Insurance
·         Low monthly cost

·         It is easy to shop and compare this type of insurance

·         Could help protect families for a certain amount of time

·         Even with the low cost of insurance—the policy holder still receives the death benefit


·         Limited coverage

·         No capital build up

·         Once a policy is in place it cannot be changed

·         The amount of this policy will be taxed

·         Premiums may go up after the term ends

Pros of Whole Life Insurance
Cons of Whole Life Insurance
·         Guaranteed investment return

·         Builds cash value

·         A person can borrow from these policies without any penalties

·         The benefits are tax free


·         High monthly cost

·         Investment returns may not be very high

·         Very complicated policies—may need to pay an insurance broker


Before picking a type of life insurance policy, it is a good idea to review the pros and cons of term and whole life insurance. Although term life is the more common type of policy that Americans have, this does not mean that it is the best fit for everyone.

Life insurance is not necessary for Americans, but it is a good idea to have that type of protection—especially if a person has dependents that rely on them for financial support. Before picking a policy, it is important to understand the two major kinds of life insurance that exist: term life insurance and whole life insurance. If a person is thinking about getting a life insurance policy, they should know and understand the pros and cons of both term and life insurance.

Trusted lender of over 250,000 customers2

Trusted by over 250,000 customers since 2002, we know how to do business the right way. Our US based customer service team is there for you seven days a week.

LoanMart © 2019 All Rights Reserved. Version:
Go To topGet it on Google Play


California loans are made or arranged pursuant to a California Financing Law License. See State Disclosures for additional disclosures.

1Loan approval is subject to meeting the lenders credit criteria, which may include providing acceptable property as collateral. Actual loan amount, term, and Annual Percentage Rate of the loan that a consumer qualifies for may vary by consumer. Loan proceeds are intended primarily for personal, family and household purposes. Minimum loan amounts vary by state. Consumers need to demonstrate ability to repay the loan.

2Based on consumers who received a loan from LoanMart from February 2002 to October 2018.

3Application processes could take five (5) minutes to complete. Upon completion, a conditional approval may be given pending review of documentation. Funding time is based on the time from final approval following receipt and review of all required documents and signing, prior to 2PM PST on a business day.

4To exercise the right to rescind, the consumer(s) must notify the lender in writing by midnight on the third calendar day from obtaining the loan. Within one business day from notice of rescission, the consumer(s) must return any monies received and fees paid on behalf of the consumer(s) by certified funds.

5Lenders recommend and encourage consumers to pay early and often and more in order to avoid additional finance charges.

If you are using a screen reader and are having problems using this website, please call 1-855-422-7412 for assistance.


Loans for Delaware, District of Columbia, Florida, Illinois, Indiana, Kansas, Kentucky, Michigan, Mississippi, Oklahoma, Ohio, Oregon, South Dakota, Tennessee, Texas, and Washington residents are made by Capital Community Bank, a Utah chartered bank located in Provo, UT, member FDIC. Loans made by Capital Community Bank will be governed by Utah law and serviced by LoanMart.

All loan applications are subject to meeting Capital Community Bank’s credit criteria, which include providing acceptable property as collateral. Consumers need to demonstrate ability to repay the loan.

Questions? or call 855-399-2261.