January marks Financial Wellness Month, making it an ideal moment to take a closer look at how well your financial plans are supporting both your present and future needs. One essential element that people frequently overlook is life insurance. While many assume it’s something you only think about later in life, the truth is that life insurance can strengthen your financial foundation at every stage.

Life insurance not only protects the people you care about most but can also help you prepare for unexpected events and, in some cases, contribute to your own financial goals while you're still alive. Below, you’ll find an overview of how life insurance works, the main types of policies, and how to ensure your coverage still fits your priorities.

Understanding the Purpose of Life Insurance

At its simplest, life insurance pays out a sum of money—known as a death benefit—to the beneficiaries you choose. These funds can help cover a wide range of financial obligations, including rent or mortgage payments, outstanding debts, funeral costs, child care, or everyday living expenses.

In other words, life insurance provides financial stability for your loved ones at a time when they need it most. It supplies quick access to cash and helps keep your family’s financial situation steady, even if something unexpected happens.

To keep your policy active, you pay premiums on a regular schedule. In exchange, the insurer promises to pay the death benefit outlined in your policy contract. Many people find this peace of mind worth the investment, which is why life insurance is often viewed as a fundamental part of financial wellness.

Comparing Term and Permanent Life Insurance

There are two primary categories of life insurance: term and permanent. Each type serves a different purpose, and your choice will depend on your current lifestyle, financial goals, and long-term needs.

Term life insurance offers protection for a specific period—often 10, 20, or 30 years. If you pass away during the selected term, your beneficiaries receive the death benefit. If the term expires while you’re still living, the coverage ends. Term policies tend to be more affordable and are a great fit during high‑responsibility years such as raising children or paying off major debts.

Permanent life insurance lasts for your entire life as long as you continue paying premiums. It also includes a built‑in savings component called cash value, which grows over time. You may be able to borrow against or withdraw from this cash value while you’re alive, though doing so will typically reduce the amount your beneficiaries receive later.

Two common types of permanent policies include:

• Whole life insurance: This type provides fixed premiums, guaranteed cash value growth, and a guaranteed death benefit. It offers stability and predictable costs over your lifetime.
• Universal life insurance: This option offers more flexibility, allowing you to adjust your premiums and death benefit. Its cash value usually grows based on market performance. While this can create more opportunities for growth, it can also introduce more risk.

Both types of permanent insurance can be helpful if you want lifetime coverage or prefer a policy that includes a savings element.

Deciding Whether Cash Value Matters for You

The cash value in a permanent policy is often appealing because it can be used to support large expenses such as education costs, medical bills, or supplemental retirement income. Over time, it can serve as a useful financial resource.

However, it’s important to understand how it works. Cash value generally grows slowly at first, and any loans or withdrawals will typically reduce your final death benefit. Permanent policies also come with higher premiums than term policies, which can make them less practical for some households.

If long‑term protection is your priority or you want predictable premiums, cash value may be a valuable addition. But many people should make sure their retirement accounts and emergency savings are well funded before relying on a life insurance policy for investment purposes.

Optional Riders to Customize Your Coverage

Life insurance doesn’t have to be one‑size‑fits‑all. Riders—additional features you can add to a policy—help tailor your coverage to your specific needs.

For example, a long‑term care rider can help pay for assistance if you develop a serious illness or disability. A terminal illness rider allows you to access part of your death benefit early if you receive a terminal diagnosis. If you choose a term policy, you may also have the option to add a return‑of‑premium rider, which refunds your premiums if you outlive the policy.

Some term policies include a conversion feature that lets you switch to a permanent policy without going through another medical exam. This can be extremely helpful if your health changes over time but your financial needs shift toward lifelong coverage.

Riders can make a policy more adaptable and better aligned with your long‑term plans.

Keeping Your Life Insurance Current

Updating your life insurance periodically is an important part of maintaining long‑term financial health. These simple habits can help ensure your coverage continues to match your life:

• Review your beneficiaries annually: Life changes quickly. Check that your listed beneficiaries still reflect your intentions, especially after major events such as marriage, divorce, or the birth of a child.
• Confirm your coverage amount: If your income, debts, or family responsibilities have grown, you may need to increase your coverage.
• Understand your conversion options: If you have term coverage, find out whether you can convert it to permanent insurance later—especially if you’re concerned about future health changes.
• Set a yearly check‑in: Reviewing your policy once a year—just like you would with your budget—helps ensure everything remains aligned with your goals.

If you’d like help reviewing your current life insurance or exploring which policy might work best for you, reach out anytime. We’re here to help you protect the people and priorities that matter most.