How Life Insurance Supports Your Financial Wellbeing

January is recognized as Financial Wellness Month, making it a great opportunity to step back and assess your overall financial picture. One area that often gets overlooked is life insurance. Many people think of it as something to consider only later in life, but it can play an important role in protecting your finances today and well into the future.

Life insurance helps safeguard the people you care about, prepares your household for unexpected events, and in certain cases, can even support your personal financial goals while you're still alive. Below, we’ll walk through the basics, the major types of life insurance, and how to keep your coverage aligned with your changing needs.

What Life Insurance Really Provides

At the most basic level, life insurance offers a payout—called a death benefit—to the individuals you choose as beneficiaries when you pass away. These funds can help with essential expenses such as mortgage or rent payments, outstanding debt, childcare costs, funeral arrangements, and everyday household needs.

In tougher moments, life insurance helps your family maintain stability. It provides accessible cash when it’s needed most, turning an overwhelming financial “what if” into a situation that is easier to manage.

To keep your policy active, you pay regular premiums. In return, the insurer guarantees that benefit as long as the policy’s terms are met. That assurance is one of the reasons life insurance is often considered a foundational part of financial wellbeing.

Term vs. Permanent Life Insurance

The two primary types of life insurance are term and permanent. Both serve different purposes, and the most suitable option depends on your goals, budget, and stage of life.

Term life insurance protects you for a set period—typically 10, 20, or 30 years. If you pass away during that term, the insurer pays out the benefit. If you outlive the term, the policy expires. Term coverage tends to be more affordable and is often a good fit during years when financial responsibilities—like raising children or paying down a mortgage—are at their highest.

Permanent life insurance, on the other hand, lasts for your entire lifetime as long as premiums are paid. These policies also include a savings-like feature known as cash value, which builds gradually over time. You may be able to borrow from or withdraw this money during your lifetime, though doing so can reduce the final payout.

Two popular types of permanent life insurance include:

Whole life insurance: This policy offers steady premiums, guaranteed cash value growth, and a predictable death benefit. It’s often chosen for its long-term stability.

Universal life insurance: This version is designed for flexibility. You may be able to adjust your premiums and death benefit, and the cash value can grow based on market performance. While this can offer more control, it also involves more risk depending on how the market behaves.

Both types of permanent insurance can support lifelong planning, particularly if you want guaranteed coverage or appreciate having a savings element built into your policy.

Deciding Whether Cash Value Makes Sense

The cash value component of permanent life insurance can act as an added resource. Over time, it may help pay for big expenses—such as tuition, medical needs, or supplementing your retirement income.

However, it’s important to understand how it works. Cash value grows slowly in the beginning, and taking out loans or withdrawals may reduce what your beneficiaries ultimately receive. Permanent policies also cost more than term insurance.

Cash value can be a valuable feature if you already need lifelong protection or prefer steady premiums, but most people should make sure their other savings goals are on track before leaning on life insurance as an investment tool.

Ways to Customize Your Coverage

Life insurance isn’t a one-size-fits-all product. Riders—optional add-ons—let you tailor a policy to better match your needs.

Common riders include options like a long-term care rider, which may help cover the cost of extended care if you become seriously ill. Another example is a terminal illness rider, which can let you use part of your death benefit early if you receive a qualifying diagnosis. For term policies, a return of premium rider may allow you to get back the money you paid if you outlive the term.

Some term policies also offer a conversion option, letting you switch to permanent coverage later without undergoing a new medical exam. If your health changes over time, this could become a very meaningful feature.

How to Keep Your Life Insurance Up to Date

Keeping your life insurance current is an important part of maintaining financial wellness. A few simple steps can help ensure your coverage stays relevant:

• Review your beneficiaries yearly. Make updates after major life events such as marriage, divorce, or the birth of a child.
• Check that your coverage amount still fits your financial responsibilities. Changes in income, debt, or family size may mean you need more—or less—coverage.
• If you have a term policy, find out whether it includes a conversion option so you understand your choices as your needs evolve.
• Plan an annual review of your policy, just as you would for your budget or savings plan, to ensure everything still aligns with your goals.

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