January marks Financial Wellness Month, making it an ideal moment to reassess your overall financial strategy. One area that often gets pushed aside is life insurance. Many people assume it’s only necessary later in life, but in reality, it can play a meaningful role in both your present stability and your future security.

Life insurance can help safeguard the people who rely on you, prepare your loved ones for life’s unexpected turns, and in certain situations, even contribute to your own financial plans while you're still here. Below, we’ll break down what life insurance actually does, the policy types you can choose from, and how to make sure your coverage still fits your needs.

What Life Insurance Really Provides

Life insurance centers around one key function: providing a payment, known as a death benefit, to the beneficiaries you select. This payout can help your family manage substantial financial responsibilities such as mortgage payments, rent, credit card balances, final expenses, childcare costs, and everyday living expenses.

In essence, life insurance keeps your family’s financial path moving, even if you’re no longer there to contribute. It delivers immediate liquidity when it matters most, easing the pressure of navigating an already difficult moment.

To keep your coverage active, you make regular premium payments. In exchange, the insurance company promises to pay out according to the terms of your policy. That confidence—knowing your loved ones will have support—is one reason many people consider life insurance a cornerstone of financial well-being.

Understanding Term vs. Permanent Life Insurance

Life insurance generally falls into two main categories: term and permanent. Each type serves its own purpose, and the right choice depends on your budget, goals, and stage of life.

Term life insurance offers coverage for a specific block of time—commonly 10, 20, or 30 years. 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 insurance is usually more budget-friendly and is often ideal for periods when financial responsibilities are high, such as raising children or paying down a mortgage.

Permanent life insurance lasts for your entire lifetime as long as you continue to pay your premiums. These policies also come with a built-in savings element known as cash value, which grows gradually over time. You can borrow from or withdraw cash value during your lifetime, though doing so can reduce the eventual death benefit.

There are two widely used forms of permanent coverage:

• Whole life insurance comes with steady premiums, guaranteed cash value growth, and a guaranteed death benefit. It’s designed to offer consistency and dependability.
• Universal life insurance is more adjustable. You may be able to change your premium payments and death benefit, and your cash value growth depends on market performance. It offers more flexibility but may carry greater uncertainty.

Both permanent options can be helpful if you want lifelong protection or prefer a policy that incorporates a long-term savings component.

Deciding Whether Cash Value Fits Your Financial Strategy

The cash value available within permanent life insurance is often considered a helpful extra. Over time, it may be used for significant needs such as education costs, medical expenses, or supplemental retirement income.

However, it’s important to understand how cash value grows. It typically accumulates slowly in the early years, and borrowing or withdrawing funds can decrease the final benefit your loved ones receive. Permanent insurance also tends to cost more than term.

Cash value can be useful if you already need lifetime coverage or if predictable premiums appeal to you. Still, many individuals benefit from prioritizing other savings vehicles before relying on a life insurance policy for investment purposes.

Customizing Your Policy With Riders

Life insurance doesn’t have to be a one-size-fits-all product. Riders—optional add-ons—allow you to tailor your policy to better match your circumstances.

For instance, a long-term care rider may help offset the cost of daily care if you experience a severe illness or injury. A terminal illness rider can give you access to a portion of your death benefit if you’re diagnosed with a qualifying condition. If you choose a term policy, you may have the option to add a return of premium rider, which refunds the premiums you’ve paid if you outlive the policy.

Some term plans also include a conversion option, allowing you to switch to a permanent policy later without undergoing another medical exam. This feature can be especially beneficial if your health changes over time and new coverage becomes harder to qualify for.

Riders can enhance your policy’s flexibility and value, making it easier to adapt your coverage as life evolves.

Simple Ways to Keep Your Coverage Current

Staying on top of your life insurance is an important part of maintaining financial wellness. A few regular habits can help ensure your policy still aligns with your needs.

• Review your beneficiaries annually. Life events such as marriage, the birth of a child, or divorce may require updates.
• Check your coverage amount. As your income or family responsibilities change, your coverage may need to adjust.
• If you have term insurance, confirm conversion options. This gives you flexibility if you later decide lifelong coverage is necessary.
• Make a yearly policy review part of your routine. Just like revisiting your budget or savings goals, a quick check-in helps keep your financial plan on track.

If you’d like support in evaluating your current policy or exploring new options, reach out anytime. We’re here to help you protect the people and priorities that matter most.