January Is a Great Time to Reassess Your Financial Foundation

With the arrival of a new year and Financial Wellness Month, this is an ideal moment to step back and evaluate the health of your overall financial plan. One important element that often gets pushed aside—yet has a meaningful impact on long-term stability—is life insurance. Many people assume it’s something to think about only later in life, but that’s not the case. Life insurance can support both your present financial priorities and your future goals.

Whether you're thinking about protecting your family, preparing for uncertainties, or exploring ways to enhance your long-term financial strategy, life insurance can offer benefits that stretch far beyond what many expect. Below, we’ll walk through what life insurance actually does, the main types of coverage, and how to make sure your policy still meets your needs.

Understanding the Real Purpose of Life Insurance

At its simplest, life insurance provides a financial payout—called a death benefit—to the people you choose if you pass away. That money can be used for essential expenses such as mortgage or rent payments, childcare, outstanding loans, funeral costs, and everyday necessities.

In other words, life insurance helps maintain the financial plans you’ve put in place for your loved ones, even if the unexpected happens. It offers immediate liquidity at a difficult time and gives your family the financial breathing room they may need.

You keep the policy active by paying scheduled premiums. In exchange, the insurer guarantees a payout under the policy’s terms. For many households, that reassurance makes life insurance a cornerstone of financial well-being.

Term vs. Permanent Life Insurance: What’s the Difference?

Life insurance falls into two main categories: term and permanent. Each type serves different financial and lifestyle needs, and knowing the difference can help you select the right fit.

Term Life Insurance

Term coverage lasts for a set period—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 tends to be more affordable and is often ideal for the years when your financial responsibilities are highest, such as raising children or paying off long-term debt.

Permanent Life Insurance

Permanent policies remain in effect for your entire life as long as premiums are paid. These policies also include an additional feature called cash value—an amount that grows over time and can be accessed through loans or withdrawals. However, taking money out can reduce the final death benefit.

Two familiar types of permanent insurance include:

• Whole life insurance: Offers steady premiums, guaranteed cash value growth, and a guaranteed death benefit. It’s structured to be predictable and stable over the long term.
• Universal life insurance: Provides more flexibility, allowing you to adjust premiums and death benefits. Cash value growth depends on market conditions, which introduces more variability but also more control.

Permanent insurance can be a helpful tool if you want lifelong coverage or appreciate the idea of a policy with a built-in savings component.

Is the Cash Value Feature a Good Fit for You?

The cash value in permanent life insurance can serve as a useful financial resource down the road. Over time, it may help with major expenses such as medical costs, college tuition, or supplemental retirement income.

However, it’s important to understand that cash value grows gradually, especially in the early years. Withdrawals or loans may reduce what your beneficiaries receive later. And because permanent policies cost more than term insurance, they aren’t the best choice for every household.

If you know you want lifelong protection or prefer fixed premiums, cash value can be an appealing benefit. Still, most people should first make sure they’re contributing appropriately to other savings and retirement accounts before relying on a life insurance policy for investment purposes.

Optional Riders That Customize Your Coverage

Life insurance can be personalized through add-ons called riders. These optional features can help ensure your policy works for your specific needs and circumstances.

Some commonly used riders include:

• Long-term care rider: Helps cover costs if you experience a serious illness or injury that requires ongoing care.
• Terminal illness rider: Allows you to access part of your death benefit early if you’re diagnosed with a qualifying terminal condition.
• Return of premium rider (for term policies): Refunds your premiums if you outlive the policy term.

Additionally, many term policies offer the ability to convert to permanent coverage later without undergoing another medical exam—an important safeguard if your health changes and you want long-term protection.

Simple Ways to Keep Your Policy Current

Life insurance shouldn’t be a “set it and forget it” purchase. Just like your budget or savings plan, it’s smart to review it regularly. Here are a few easy habits to adopt:

• Review your beneficiaries yearly: Check that the right people are listed, especially after major life changes like marriage, divorce, or the arrival of a child.
• Evaluate your coverage amount: As your financial situation evolves—more income, new debts, or additional family members—your insurance needs may change too.
• Check conversion options: If you have a term policy, see whether you can convert to permanent coverage without new medical exams.
• Schedule an annual policy review: A quick yearly check-in can help ensure your coverage still aligns with your goals.

We’re Here to Help You Protect What Matters

If you’d like help reviewing your current life insurance or exploring policy options, reach out anytime. We're here to support you as you build and maintain a financial plan that protects the people and priorities you care about most.