January is recognized as Financial Wellness Month, making it a great moment to reflect on your overall financial picture. One area that often gets pushed aside is life insurance. Many people assume it’s only important later in life, but the truth is that life insurance can strengthen your financial wellbeing at every stage.

Life insurance can help protect your loved ones, shield your household from unexpected challenges, and in some cases, even support long-term financial goals while you're still alive. Below is a refreshed look at what life insurance does, how different policy types work, and how to make sure your coverage still meets your needs.

What Life Insurance Really Provides

At its simplest, life insurance offers a payout—called a death benefit—to the people you designate if you pass away. This money can be used for many essential expenses, such as mortgage or rent payments, credit card balances, funeral costs, childcare, or everyday household needs.

Think of life insurance as a financial safety net. It keeps your family's financial plan moving forward, even if the unexpected occurs. It ensures available cash during a difficult time and helps your loved ones face a challenging situation with more stability.

You maintain your coverage by paying premiums on a regular schedule. In exchange, the insurer guarantees a payout under the terms of your policy. That reliability is a big reason life insurance is considered an important component of financial wellness.

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

Life insurance generally comes in two major forms: term and permanent. Each type serves a different purpose, and the best fit for you depends on your goals, budget, and stage of life.

Term life insurance provides coverage for a predetermined period—often 10, 20, or 30 years. If you pass away during that time, your beneficiaries receive the death benefit. If the term ends and you’re still living, the policy expires. Term insurance is often more cost-friendly and is ideal when you want protection during years with significant responsibilities, such as raising children or covering a mortgage.

Permanent life insurance stays in effect for your entire life as long as you keep paying the premiums. It also includes a cash value component, which grows over time. You can borrow or withdraw from this cash value while living, though doing so may reduce the payout your beneficiaries receive.

Common Types of Permanent Life Insurance

Whole life insurance offers guaranteed premiums, predictable cash value growth, and a guaranteed death benefit. It appeals to people who want stability and long-term certainty.

Universal life insurance provides more flexibility. You can adjust your premiums and death benefit as needed, and the cash value increases based on market conditions. It has more potential risk but also gives you more control over how the policy functions.

Both forms of permanent life insurance can be valuable if you’re looking for lifelong protection or you like the idea of having a built-in savings feature.

Understanding Cash Value: Is It a Good Fit for You?

The cash value feature of permanent life insurance is often viewed as a helpful extra. Over time, this money can be used for significant expenses, including medical needs, education costs, or even supplementing retirement income.

However, it’s important to manage expectations. Cash value typically builds slowly, especially in the early years. Taking withdrawals or loans may reduce the final death benefit your loved ones receive. Permanent policies also tend to cost more than term insurance.

If you already need lifelong coverage or prefer predictable premiums, the cash value benefit can be an added perk. Still, many people should prioritize other savings or retirement accounts before relying on a life insurance policy for investing purposes.

Riders That Personalize Your Policy

Life insurance isn’t a one-size-fits-all solution, which is why many policies allow for riders—optional add-ons that tailor your coverage to your unique circumstances.

Some useful rider options include:

• Long-term care rider: Helps pay for care if you become seriously ill or unable to perform daily activities independently.
• Terminal illness rider: Lets you access a portion of your death benefit early if you’re diagnosed with a qualifying terminal condition.
• Return of premium rider: Available on certain term policies and refunds your premiums if you outlive the policy term.

Additionally, many term policies include a conversion option, allowing you to switch to permanent coverage later on without a new medical exam. This can be especially valuable if your health changes over time.

These enhancements can make your coverage more adaptable and better aligned with your long-term needs.

How to Keep Your Life Insurance Current

Maintaining your life insurance is an important part of staying financially healthy. A few simple habits can help keep your coverage up to date.

First, review your beneficiaries every year. Life changes—like marriage, divorce, or the birth of a child—may require updates to ensure the right people are listed.

Next, make sure your coverage amount still matches your situation. If your income, family responsibilities, or debts have changed, your policy may need an adjustment.

If you have a term policy, take note of whether it includes a conversion option. This feature can become extremely valuable if you decide you want lifelong coverage down the road.

Finally, set aside time once a year—similar to reviewing your budget or savings—to look over your policy details. A yearly check-in ensures your coverage stays aligned with your goals.

If you’d like help evaluating your current life insurance or exploring your options, reach out anytime. We’re here to support you in protecting what matters most.