Taking a Fresh Look at Your Financial Health

 

Since January is recognized as Financial Wellness Month, it’s an ideal moment to pause and reassess your long-term financial picture. Among the many pieces that make up a strong plan, life insurance is one that people frequently overlook. It’s often assumed to be something you only need later in life, but the reality is that life insurance can strengthen your financial foundation at every stage.

Life insurance can help safeguard the people you care about, provide stability during unexpected events, and in some cases, even support goals you set for yourself while you’re still living. Below, we’ll explore what life insurance does, the types of policies available, and how to ensure your coverage keeps up with the changes in your life.

What Life Insurance Really Provides

 

At its simplest, life insurance delivers a payout—known as a death benefit—to the people you name if you pass away. That money can help your loved ones manage major expenses such as mortgage or rent payments, lingering debts, childcare costs, funeral arrangements, or everyday bills.

In other words, life insurance helps keep your family’s financial progress on track if something unexpected happens. It offers immediate liquidity when it’s needed most and transforms a stressful “what if” scenario into something that can be handled more confidently.

You maintain coverage by paying regular premiums. In return, the insurance company guarantees the benefit outlined in your policy. That guaranteed protection is one reason life insurance is commonly viewed as an essential piece of overall financial wellness.

Term vs. Permanent Life Insurance

 

There are two main categories of life insurance: term and permanent. Each option serves a different purpose, and the right fit depends on your financial goals, your responsibilities, and your budget.

Term Life Insurance

 

Term policies provide coverage for a specific time frame—often 10, 20, or 30 years. If you pass away during that window, your beneficiaries receive the death benefit. If the term ends and you’re still living, the policy simply expires.

Because term insurance is usually more affordable, it’s a practical choice for people who want coverage during the years when financial responsibilities are highest, such as raising children or paying down a mortgage.

Permanent Life Insurance

 

Permanent life insurance lasts your entire lifetime as long as premiums are paid. It also includes a savings component known as cash value, which grows gradually. You can access this money through withdrawals or loans while you’re alive, though doing so may reduce the benefit your loved ones receive later.

Two of the most common types of permanent coverage include:

• Whole life insurance: Offers steady premiums, guaranteed cash value growth, and a guaranteed death benefit. Its predictability makes it appealing to people who prefer stable, long-term planning.
• Universal life insurance: Provides more flexibility by allowing you to adjust premiums and death benefits. The cash value’s growth depends on market performance, which means it may fluctuate—creating both opportunity and risk.

Both whole and universal life can be useful if you want coverage that lasts your entire life or you’re interested in a policy that includes a built-in savings component.

Should You Consider Cash Value?

 

The cash value portion of a permanent policy is sometimes seen as an added perk. Over time, this reserve can be used to help with big expenses like tuition, medical needs, or even supplementing retirement income.

However, it’s important to have realistic expectations. Cash value builds slowly in the early years, and borrowing against it or making withdrawals can reduce the final payout your beneficiaries receive. Permanent life insurance also tends to cost more than term coverage.

If you already need lifetime protection or prefer predictable premiums, cash value can be a meaningful bonus. But most financial experts recommend ensuring your retirement plans and other savings goals are fully funded before depending on a life insurance policy as an investment tool.

Customizing Your Policy With Riders

 

Life insurance isn’t a one-size-fits-all product, which is why many insurers offer optional riders—add-ons that help tailor your coverage to your personal circumstances.

Some common examples include:

• Long-term care rider: Helps offset the cost of extended care if you become seriously ill or unable to perform daily activities.
• Terminal illness rider: Gives you access to a portion of your benefit if you’re diagnosed with a terminal condition.
• Return of premium rider: On certain term policies, this option refunds your premiums if you outlive the term.

Some term policies also offer the ability to convert to permanent life insurance later without completing another medical exam. This can be especially valuable if your health changes and qualifying for a new policy becomes more challenging.

How to Keep Your Policy Up to Date

 

Maintaining your life insurance is an important part of staying financially organized. A few simple habits can help ensure your coverage continues to support your goals.

• Review your beneficiaries annually: Life changes quickly—marriage, divorce, and children can all affect who should be listed.
• Reassess your coverage amount: As your income, debts, or family needs evolve, the amount of protection you require may shift.
• Check your term conversion options: If you have a term policy, find out whether you can convert it to permanent coverage without new medical tests.
• Make yearly check-ins part of your routine: Just like reviewing your savings strategy or budget, a quick annual policy review helps keep things current.

If you'd like support reviewing your current policy or exploring new options, reach out anytime. We’re here to help you protect what—and who—matters most.