January marks Financial Wellness Month, making it an ideal moment to revisit your overall financial strategy. One area that often gets less attention than it deserves is life insurance. While many people assume it’s something to worry about later in life, it can actually play a meaningful role in your financial stability right now and well into the future.

Life insurance can help safeguard the people you care about, provide a cushion during life’s unexpected moments, and in certain situations, even support your own financial objectives while you’re still here to enjoy them. Below, we’ll walk through what life insurance does, the different types of policies, and how to be sure your coverage still fits your needs.

What Life Insurance Actually Provides

At its simplest, life insurance pays out money—called a death benefit—to the people you choose if you pass away. Your beneficiaries can use this payout for a variety of expenses, such as housing costs, outstanding loans, funeral arrangements, child care, or general day-to-day bills.

In essence, life insurance keeps your family’s financial path steady if the unexpected happens. It provides immediate access to funds during a difficult moment and offers a sense of stability when it’s needed most.

You make regular premium payments to keep your coverage active. In exchange, the insurance company promises to pay the death benefit under the policy’s terms. Knowing that protection is in place can offer valuable peace of mind—one reason many experts consider life insurance a foundational piece of financial wellness.

Term vs. Permanent Life Insurance

Most policies fall into one of two categories: term life insurance or permanent life insurance. Each type serves a different purpose, and the right fit depends on your life stage, budget, and long-term goals.

Term life insurance covers you for a specific period—commonly 10, 20, or 30 years. If you pass away during that timeframe, the death benefit is paid to your beneficiaries. If you outlive the term, the policy simply ends. Term coverage is typically more affordable and is often ideal for times in life when your financial obligations are highest, such as raising children or paying off a mortgage.

Permanent life insurance lasts your entire lifetime as long as you continue making premium payments. It also includes a savings component known as cash value, which gradually grows over time. You can borrow against it or access some of the funds while you’re still alive, though doing so may reduce the eventual death benefit.

There are two well-known types of permanent life insurance:

• Whole life insurance offers fixed premiums, guaranteed cash value growth, and a set death benefit. It’s consistent and straightforward.
• Universal life insurance allows more flexibility. You can adjust your premiums and death benefit, and the cash value may increase based on market conditions. It can involve more risk but offers more room for customization.

Both forms of permanent coverage can be valuable if you’re looking for lifelong protection or if the idea of combining insurance with a long-term savings tool appeals to you.

Understanding Cash Value

The cash value found in permanent policies is often viewed as a helpful extra. Over the years, it can be tapped for major expenses like education, medical costs, or even retirement needs. However, it’s important to remember that cash value starts out slowly and builds over time. Accessing it too soon—or too frequently—may reduce the benefit your family receives later.

Permanent policies also tend to cost more than term insurance. For many people, it may be wise to focus on retirement accounts or emergency savings first before relying on a policy for investment purposes. If you already need lifelong coverage or prefer steady premiums, cash value can be a welcomed bonus.

Riders That Help Personalize Your Policy

Life insurance isn’t meant to be one-size-fits-all, which is where policy riders come in. Riders provide optional add-ons that tailor your coverage to your needs.

For example, a long-term care rider may help cover the cost of extended care if you experience a serious illness or injury. A terminal illness rider might allow you to receive a portion of your benefit early if you face a life-limiting diagnosis. If you choose a term policy, a return-of-premium rider could reimburse your payments if you outlive the term.

Some term policies also allow you to convert to permanent coverage without a new medical exam. This can be especially valuable if your health changes and you want lifelong coverage later on.

These add-ons can make your policy more adaptable, more comprehensive, and better aligned with your long-term plans.

How to Keep Your Policy Current

Keeping your life insurance up to date is an important part of your financial routine. Fortunately, a few simple habits can make a big difference.

• Review your beneficiaries annually, especially after major life changes like marriage, divorce, or welcoming a new child.
• Reevaluate your coverage amount to see whether it still matches your income, debts, and family responsibilities.
• If you have a term policy, check if it includes a conversion feature so you know your options in case your needs shift.
• Set aside time once a year to review your policy, just as you would your budget, investments, or savings goals.

A quick yearly check-in can help ensure your policy remains an effective part of your financial plan.

If you need help reviewing your existing coverage or want to explore new options, feel free to reach out. We’re here to help you protect the people and priorities that matter most.