January’s focus on Financial Wellness Month makes it an ideal time to revisit your overall financial picture. One area that often gets pushed aside is life insurance. Even though many people view it as something to consider later in life, it can actually be a valuable part of your financial well-being right now and well into the future.

Life insurance helps safeguard the people you care about, prepares your family for life’s unexpected moments, and in some cases can even contribute to your long-term financial goals. Below, we’ll break down how life insurance works, the different policy types, and how to ensure your coverage still supports your needs.

Understanding the Purpose of Life Insurance

 

At its simplest, life insurance provides a payout—called a death benefit—to the individuals you name as beneficiaries. This money can help cover major costs such as mortgage or rent, credit card balances, childcare, funeral expenses, or everyday living needs.

In other words, life insurance helps keep your loved ones financially stable if something happens to you. It provides accessible funds when they’re needed most and helps turn a difficult “what if” scenario into something more manageable.

You pay ongoing premiums to keep the policy active, and in return, the insurer guarantees a payout under the contract terms. That added sense of security is why life insurance is often considered a cornerstone of financial preparedness.

Term vs. Permanent Life Insurance

 

Life insurance generally comes in two forms: term and permanent. Each type serves a different purpose, and the best fit for you depends on your goals, financial situation, and life stage.

Term life insurance provides coverage for a specific number of years—often 10, 20, or 30. If you pass away during that period, your beneficiaries receive the death benefit. If the term ends while you're still living, the policy simply expires. Term coverage is usually more budget-friendly and works well during high-responsibility periods, such as raising children or paying off a mortgage.

Permanent life insurance lasts your entire lifetime as long as premiums are paid. It also includes a cash value component that grows over time. You can borrow from or withdraw part of this value while you’re living, though doing so can reduce the eventual death benefit.

Two common forms of permanent life insurance include:

 

• Whole life insurance: Provides fixed premiums, guaranteed cash value growth, and a set death benefit. It’s steady, predictable, and long-term.
• Universal life insurance: Offers flexible premiums and adjustable death benefits. Its cash value growth depends on market performance, offering more control but sometimes more risk.

 

Both options can complement long-term planning if you want lifelong coverage or value having a policy with a built-in savings element.

Is Cash Value a Good Fit for You?

 

The cash value within a permanent policy is often viewed as a helpful extra feature. Over time, it can be used for big expenses like education costs, medical bills, or supplementing retirement income.

However, it’s important to set the right expectations. Cash value typically grows slowly in the beginning, and borrowing or withdrawing funds can reduce the amount your family receives in the end. Permanent life insurance also tends to cost more than term coverage.

If you need lifelong protection or prefer stable premiums, cash value can be a valuable perk. But most people should prioritize other savings tools—like retirement accounts—before relying on a life insurance policy for investment purposes. If you have the capacity to save more in a tax-advantaged account, cash value insurance is worth a look.

Customizing Your Policy With Riders

 

Life insurance isn’t one-size-fits-all, which is where riders—optional add-ons—come into play. They help tailor your policy to your personal needs.

For instance, a long-term care rider can help pay for care if you become seriously ill or injured. A terminal illness rider allows early access to part of your death benefit if you receive a qualifying diagnosis. For term policies, a return-of-premium rider may refund the premiums you’ve paid if you outlive the term.

Many term policies also allow you to convert to permanent coverage later without undergoing a new medical exam. This can be especially useful if your health changes and qualifying for a new policy becomes more difficult.

These features help your policy adapt as your life and circumstances evolve.

Keeping Your Coverage Current

 

Staying on top of your life insurance is an important part of maintaining financial wellness. Here are a few simple ways to keep things up to date:

 

• Review your beneficiaries annually: Life changes quickly—marriage, divorce, and new children can affect who you want listed.
• Confirm that your coverage still matches your needs: Adjust your policy if your debts, income, or family responsibilities have changed.
• Check for conversion options: If you have term life insurance, see if you can switch to permanent coverage without a medical exam.
• Conduct a yearly policy review: Treat it like revisiting your budget—regular check-ins help you stay prepared.
• If you no longer need your insurance, contact us to see if it has value in the secondary market. Many large pension plans and endowments will purchase your policy from you.

 

If you’d like help reviewing your current life insurance or looking into new options, reach out anytime. We're here to help you protect what matters most.