January marks Financial Wellness Month, making it an ideal moment to take stock of your financial life and identify areas that deserve a closer look. One topic that tends to sit quietly in the background—but shouldn’t—is life insurance. Many people assume it’s only relevant later in adulthood, yet it can be a central part of a well-rounded financial strategy at nearly any stage of life.

Life insurance not only helps safeguard the people who depend on you but can also help your household weather financial surprises. In some cases, it can even support personal financial goals while you’re still around to enjoy the benefits. Below, we’ll explore what life insurance actually does, the types of policies available, and how to make sure your coverage continues to match your needs over time.

What Life Insurance Really Accomplishes

At its most basic level, life insurance provides a payout—called a death benefit—to the individuals you select as beneficiaries. That money can be used to manage a wide range of expenses, including mortgage or rent payments, outstanding debts, day-to-day bills, child care, or final expenses.

Essentially, life insurance helps keep your family’s financial foundation stable during an incredibly difficult time. It delivers quick access to funds when they are needed most and helps turn a stressful “what happens if…” scenario into a more manageable one.

To keep the policy active, you pay premiums on a regular schedule. In exchange, the insurance company promises to pay out under the terms of your contract. That sense of stability and protection is a major reason life insurance is often considered a crucial component of long-term financial well-being.

The Difference Between Term and Permanent Life Insurance

Most life insurance policies fall into one of two categories: term or permanent. Each type meets different needs, and understanding the distinctions can help you make a choice that matches your budget, life stage, and financial goals.

Term life insurance offers protection for a specific period—commonly 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive the death benefit. If the term expires while you’re still living, the policy ends. Because term coverage is usually more affordable, it’s often chosen by people who want coverage during high-demand years, such as while raising a family or working to pay down a mortgage.

Permanent life insurance lasts for your entire lifetime as long as premiums are paid. In addition to lifelong protection, it includes a savings component known as cash value, which grows gradually over time. Depending on the policy, you may be able to borrow from or withdraw this money while you’re alive, though doing so can reduce the final payout.

Two of the most common forms of permanent coverage include:

• Whole life insurance: This type comes with fixed premiums, guaranteed cash value accumulation, and a guaranteed death benefit. It offers consistency and long-term predictability.
• Universal life insurance: Universal life provides flexibility in both premiums and death benefit amounts. The cash value grows based on market performance, which creates the potential for both greater growth and greater risk.

Both whole and universal life can be valuable tools for long-term planning, especially if you prefer lifelong coverage or like the idea of an insurance policy with a built-in savings element.

Is Cash Value a Good Fit for Your Needs?

The cash value element in permanent life insurance is sometimes seen as an appealing bonus. Over many years, it can become a resource you can tap for large expenses such as college costs, medical needs, or retirement income supplements.

That said, it’s important to keep expectations grounded. Cash value typically builds slowly, especially in the early years of a policy. Borrowing or withdrawing funds may reduce the amount your loved ones receive later. In addition, permanent insurance generally costs more than term insurance because of its extended coverage and savings component.

If lifetime coverage or stable premiums matter to you, the cash value feature can be a welcome addition. But for most people, it’s wise to make sure other core savings and retirement strategies are adequately funded before relying on a life insurance policy as an investment vehicle.

Riders That Enhance Your Policy

Life insurance is not a one-size-fits-all solution. Riders—optional add-ons—allow you to tailor a policy to your personal situation and future needs.

For example, a long-term care rider can help cover the cost of assistance if you become seriously ill or injured and need ongoing support. A terminal illness rider gives you access to part of your death benefit if you are diagnosed with a terminal condition. If you choose term life insurance, a return of premium rider may allow you to get back the premiums you paid if you outlive the policy.

Some term policies also offer a conversion option, letting you switch to a permanent policy without taking a new medical exam. This can be extremely valuable if your health changes and qualifying for new coverage becomes more challenging.

These enhancements can make your policy more adaptable and more aligned with your long-term plans.

Simple Ways to Keep Your Coverage Up to Date

Maintaining your life insurance is an important part of staying financially healthy. A few simple habits can help ensure your policy still fits your life:

• Review your beneficiaries annually. Confirm that the right people are listed, especially after milestones like marriage, divorce, or welcoming a new child.
• Reevaluate your coverage amount. If your income, financial responsibilities, or family size have changed, your protection may need adjusting.
• Check for conversion options. If you have a term policy, see whether converting to permanent coverage is available and whether it makes sense for your situation.
• Schedule a yearly policy review. Treat it like revisiting your budget or savings goals—regular attention helps you stay on track.

If you’d like assistance reviewing your current policy or exploring new options, reach out anytime. We’re here to support you as you work to safeguard the people and priorities that matter most.