January marks Financial Wellness Month, making it an ideal moment to step back and assess how well your financial plans support your long‑term goals. While budgeting, saving, and investing usually take center stage, there’s one important piece that often gets pushed to the side—life insurance. Although many people think of it as something only older adults need, life insurance can be a valuable and stabilizing part of your financial picture at any age.

Life insurance protects the people who depend on you, creates a safety net for unexpected events, and in some cases, can even contribute to your own financial strategy while you’re alive. Below, we’ll break down what life insurance really accomplishes, the main types of policies available, and how to keep your coverage aligned with your life as it evolves.

Understanding the Purpose of Life Insurance

At its simplest, life insurance provides a payout—called a death benefit—to the beneficiaries you choose. This money can be used for many essential expenses, including mortgage or rent payments, lingering debt, funeral costs, child care, or everyday living needs.

Think of it as a financial buffer that helps your family maintain stability during an incredibly difficult time. The death benefit offers immediate liquidity, ensuring your loved ones aren’t scrambling to cover bills or make major financial decisions under stress.

You keep your policy active by paying regular premiums. In exchange, your insurance company guarantees a payout if the terms of the policy are met. This dependable layer of protection is one reason life insurance is considered a key pillar of long‑term financial wellness.

How Term and Permanent Life Insurance Differ

There are two main categories of life insurance: term and permanent. Both are designed to provide financial protection, but they operate differently and fit different needs.

Term Life Insurance

Term life insurance provides coverage for a set period—commonly 10, 20, or 30 years. If you pass away during that timeframe, your beneficiaries receive the death benefit. If the term ends and you’re still living, the policy simply expires unless you renew it.

This type of insurance is usually the most affordable and is well‑suited for the years when financial responsibilities are highest, such as raising children, paying off loans, or supporting a household on a tight budget. It’s straightforward, predictable, and cost‑efficient.

Permanent Life Insurance

Permanent life insurance lasts your entire life as long as premiums are paid. In addition to providing lifelong coverage, it includes a cash value component—a savings feature that grows gradually over time. You can borrow against it or withdraw a portion of the funds, though doing so may reduce the future death benefit.

Two popular forms of permanent insurance include:

• Whole life insurance: Offers guaranteed premiums, predictable cash value growth, and a fixed death benefit. It’s designed for people who prefer lifelong stability and minimal fluctuation.
• Universal life insurance: Gives you more flexibility. Premiums and death benefits can be adjusted, and cash value accumulation depends partly on market performance. It carries more risk but also provides more control.

Permanent policies are often used for long‑term planning, especially when someone wants coverage for life or likes the idea of combining insurance with a savings‑style feature.

Deciding Whether Cash Value Is a Good Fit

The cash value feature in permanent life insurance is often viewed as a helpful bonus. Over time, it can become a resource for large expenses such as education costs, medical needs, or retirement goals. Since it grows slowly in the early years, it’s not a quick source of funding, but it can be beneficial over decades.

However, it’s important to understand the tradeoffs. Borrowing or withdrawing from cash value can reduce what your family ultimately receives. Permanent policies also tend to be significantly more expensive than term alternatives.

Cash value can be a smart addition if you already know you need lifelong coverage or want the predictability of fixed premiums. For many people, though, it’s wise to prioritize contributions to retirement accounts or other savings vehicles before relying on life insurance as an investment strategy.

Riders That Help Customize Your Policy

No two families have the exact same needs, which is why life insurance policies often allow optional add‑ons called riders. These extra features help tailor your coverage to better match your personal situation.

A few examples include:

• Long‑term care rider: Helps pay for assistance if you become seriously ill or injured and require extended care.
• Terminal illness rider: Gives you access to a portion of your death benefit if you’re diagnosed with a terminal condition.
• Return‑of‑premium rider: Available on some term policies—if you outlive the term, you may receive your premiums back.

Some term policies also offer a conversion option, allowing you to switch to permanent coverage without undergoing another medical exam. This can be especially valuable if your health changes later, making it harder to qualify for a new policy.

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

Simple Ways to Keep Your Policy Current

Just like your budget or investment strategy, your life insurance needs regular review. Life changes quickly, and your policy should evolve along with it.

Here are some helpful habits to adopt:

• Review your beneficiaries annually: Confirm that the right people are listed, especially after major events such as marriage, divorce, or the arrival of a new child.
• Reevaluate your coverage amount: Make sure the death benefit still reflects your family’s financial needs—changes in income, debt, or dependents can affect the amount you need.
• Check term conversion options: If you have a term policy, know whether you can convert it to permanent coverage later without a new medical exam.
• Schedule a yearly policy check‑in: A quick review can keep your coverage aligned with your financial goals and give you peace of mind.

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