January marks Financial Wellness Month, making it an ideal opportunity to reassess your overall financial picture. One area that often gets overshadowed by budgeting and saving is life insurance. Many people assume it’s only necessary later in life, but it can be an important foundation for your financial stability at every stage.

Life insurance can help safeguard the people who depend on you, offer protection from unexpected challenges, and in some cases, even contribute to long-term financial goals. Below, we’ll explore how life insurance works, the different types of policies available, and simple ways to keep your coverage aligned with your life.

Understanding the Role of Life Insurance

At its simplest, life insurance guarantees a payment—called a death benefit—to the beneficiaries you choose if you pass away. This money can help your loved ones manage everyday costs such as rent or mortgage payments, debt, child care, or funeral expenses.

In essence, life insurance helps maintain your family’s financial momentum during a difficult time. It provides immediate liquidity when it’s most needed and turns an uncertain “what if” into something more manageable.

To keep your policy active, you make regular premium payments. In return, the insurer promises to distribute the death benefit according to the terms of the policy. That assurance is a major reason why life insurance is often considered a core piece of a strong financial wellness plan.

Comparing Term and Permanent Life Insurance

Most life insurance falls into two categories: term and permanent. Each type serves different needs, and choosing between them will depend on your financial goals, family situation, and long‑term plans.

Term life insurance provides protection for a set period—often 10, 20, or 30 years. If you pass away during that window, your loved ones receive the death benefit. When the term ends, the policy expires. Term coverage is usually more affordable and can be a great fit when you want to secure coverage during higher‑responsibility years, such as while raising children or paying off major debts.

Permanent life insurance, by contrast, lasts a lifetime as long as premiums are paid. It includes a cash value component that builds over time and can be accessed while you’re still living. Since this type of policy offers lifelong protection and savings potential, it generally comes with higher premiums.

Two common forms of permanent life insurance include:

• Whole life insurance: Offers fixed premiums, predictable growth in cash value, and guaranteed benefits. It’s designed for consistency and stability.
• Universal life insurance: Provides greater flexibility. You can adjust premiums and death benefits, and the cash value often grows in relation to market performance. With that flexibility, however, comes additional risk.

Both types can be useful for long-term planning, especially if you want lifelong protection or value the idea of a built‑in savings feature.

Is Cash Value a Good Fit for You?

The cash value element of permanent life insurance can be appealing because it creates a pool of money that grows over time. You can borrow against it or withdraw funds to help with major expenses, such as education costs, medical needs, or supplemental retirement income.

However, it’s important to understand the trade‑offs. Cash value typically accumulates slowly in the early years. Any loans or withdrawals you take may reduce your policy’s death benefit. Permanent policies are also more expensive than term coverage, which can impact your budget.

If you already know you want lifelong protection or prefer predictable premiums, permanent life insurance with cash value may make sense. But for most people, it’s wise to make sure other savings and retirement accounts are fully supported before relying on life insurance for investment purposes.

Riders That Personalize Your Coverage

Life insurance isn’t a one‑size‑fits‑all product, and riders—optional add‑ons—allow you to tailor your policy to better match your needs.

Some commonly used riders include:

• Long‑term care rider: Helps cover costs if you need extended care due to illness or injury.
• Terminal illness rider: Allows early access to part of your death benefit if you’re diagnosed with a terminal condition.
• Return of premium rider: With certain term policies, this rider returns the premiums you’ve paid if you outlive the policy.

Some term policies also offer a conversion option, allowing you to switch to permanent life insurance without completing a new medical exam. This can be particularly beneficial if your health changes later on.

These features can make your policy more adaptable and better aligned with your long‑term financial objectives.

Simple Ways to Keep Your Coverage Current

Maintaining your life insurance is an important part of ongoing financial wellness. A few small habits can help ensure your policy continues to support your goals.

Start by reviewing your beneficiaries each year. Life changes like marriage, divorce, or the arrival of a new child can affect whom you want listed. Next, consider whether your coverage amount still aligns with your financial responsibilities. As income, debt, or household size changes, your policy may need updating.

If you have a term policy, check whether you have the option to convert it to permanent coverage. This can help secure future protection without additional medical exams, which is useful if your health situation shifts.

Finally, include your life insurance in your annual financial review—just as you would with your budget, investments, or savings plan. Regular check‑ins help ensure everything continues to support your family’s needs.

If you'd like assistance reviewing your current policy or exploring new coverage, reach out anytime. We’re here to help you safeguard what matters most.