While being underinsured is the biggest problem facing most life insurance consumers, there are two other problems you need to keep in mind. Most consumers need term insurance because most consumer's needs for life insurance are temporary. When talking about a replacement income for dependents, younger families are faced with the greatest needs for insurance, particularly when you consider that they have few cash assets to fall back on. They are also in a position of having the least amount of money to spend on life insurance premiums. Having said that, many young people are persuaded by life agents to buy whole life insurance.
Whole life is a product poorly suited to address the income replacement problem.
The argument for whole life is that it will provide a level premium. This is in contrast to term insurance which gets more expensive as you get older. While term does get expensive later, the much lower initial cost fits most consumers' insurance needs. As noted, young families have the greatest insurance need, and term insurance is the most affordable way to buy that protection. Term only gets more expensive when it is needed less.