The oldest joke in the book amongst insurance agents and policy holders is the old “now I’m worth more dead than alive” line. Every agent has heard it a thousand times, and just about everyone who has ever taken out a large term life insurance policy has said it, to himself if not aloud. But is it true?

Obviously (or hopefully, at least), you’re not worth more dead than alive in an esoteric sense. Chances are, if you were to die, your family won’t miss you any less for having a large check delivered to them. While the money is very useful for taking care of final expenses, paying off bills, and recouping some of the income they would lose if you were to cash out before your time, no one can replace you. Life insurance doesn’t even try to do that.

What life insurance does, ideally, is make up for the financial losses your family would suffer if you were today. And those losses can be substantial. Before you claim that you’re worth more dead, you might just want to have an idea of what you’re actually worth alive.

• First of all, consider the costs your family doesn’t incur while you’re still living. Between $5,000 and $10,000 will be spent just taking care of funeral costs. Cremation saves a little, but is still generally thousands of dollars. So, living, at the very least, you are saving on funeral expenses.

• Income. Maybe you only make $19,000 per year. Maybe even less. But when you add that up over the course of 40 to 50 working years, it adds up to a small fortune. If you were to pass away unexpectedly, your family would be out your income, times the number of working years you have left.

• Services. Most people never stop to think how much they actually do for a household. Maybe you’re a Mr. Fix-It (or Ms. Fix-It, in these equal opportunity times). Or maybe you clean the house, mow the lawn, or whatever. All of these are things that will either have to be done by someone else in the household or hired out. Unless there truly is someone else in your family who truly do everything you do, some of it will need to be hired out, which costs money. Money which you are worth alive.

Hopefully you’re getting the picture that you’re very valuable, not only relationally, but financially. When buying term life insurance, consider carefully just how much your family would be out if something were to happen to you.

Photo via jonathanb1989