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I have it off for every app that doesn't absolutely need it, and for those that do, it's set to "while using". For instance, my camera, Wikipedia, or DropBox never need my location for what they do, but obviously Google Maps or Find My iPhone do, when they are active. There's just no reason to have multiple apps accessing my location data all the time. I'm generally not paranoid about these sorts of things but there are A LOT of apps that in my opinion have no need to access my location information, and yes, it does help with battery life too.
 
For Location Services.. I have the "While Using The App" ticked on for every app on the list.. and I do not see major battery drains!
Use your iPhone as you need to.. try not to stress about battery life.. iOS is very optimised (based on past Android experience anyway)!
 
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