January marks Financial Wellness Month, making it an ideal time to reflect on the strength and stability of your financial plans. While budgeting, saving, and investing often take center stage, one essential piece of long-term security is frequently overlooked: life insurance. Many people think of it only as something needed later in life, but in reality, it can play an important role in your financial wellbeing at every stage.

Life insurance can offer meaningful protection for the people you care about, help prepare your family for major challenges, and in some cases, even support your financial goals while you're still living. Below, we'll walk through the fundamentals of how life insurance works, the different kinds of policies available, and how to make sure your coverage still aligns with your current needs.

What Life Insurance Actually Provides

At its most basic level, life insurance creates a financial safety net for your loved ones. When you pass away, your chosen beneficiaries receive a death benefit—a payout they can use for important expenses such as housing costs, unpaid debt, funeral arrangements, child care, or everyday bills. This money helps keep your family steady during a difficult time and ensures that financial obligations don’t pile onto emotional stress.

By paying regular premiums, you keep your policy active. In exchange, the insurer guarantees a payout as long as the terms of the policy are met. This assurance provides valuable peace of mind, which is why life insurance is often considered a foundational part of a healthy financial plan. It supplies immediate liquidity when it's needed most and helps transform an overwhelming “what if” into something more manageable.

Understanding Term vs. Permanent Life Insurance

Most policies fall under two main types: term life insurance and permanent life insurance. Both serve important purposes, but the right choice depends on your budget, priorities, and long-term goals.

Term life insurance covers you for a specific period—typically 10, 20, or 30 years. If you pass away during that timeframe, your beneficiaries receive the death benefit. If the term expires while you're still living, the coverage ends. Term insurance tends to be more affordable and is especially useful during years when responsibilities are high, such as raising children, covering major debts, or paying off a mortgage.

Permanent life insurance works differently. As long as you continue paying the premiums, the policy remains in force for the rest of your life. It also includes a built-in savings component known as cash value, which grows over time. You can borrow against it or make withdrawals while you're alive, though doing so can reduce the eventual death benefit.

Permanent life insurance typically comes in two common forms:

• Whole life insurance includes fixed premiums, guaranteed cash value growth, and a guaranteed death benefit. It’s designed to be predictable and stable.
• Universal life insurance is more flexible. You can adjust your premiums and possibly your coverage amount, and the cash value growth may depend on market conditions. It offers more control but may also carry more risk.

Both term and permanent life insurance can be valuable depending on your needs. Term life offers straightforward protection at an affordable price, while permanent life provides lifetime coverage and a savings element many people find appealing.

Should You Consider Cash Value?

The cash value feature of permanent insurance can be a helpful financial tool. Over the years, this savings portion can grow and might be used for major expenses such as education costs, medical needs, or supplementing retirement income.

However, it’s important to understand how cash value works. It typically builds gradually, and borrowing against it or withdrawing funds may reduce the amount your beneficiaries receive later. Permanent policies are also more expensive than term coverage, so it’s wise to ensure your other essential savings goals—like retirement accounts or emergency funds—are on track before treating cash value as an investment strategy.

If you already know you need coverage for your entire lifetime or prefer the predictability of fixed premiums, then the cash value element can be a meaningful bonus. Just be sure to consider the full picture when deciding what fits best into your financial plans.

Enhancing Your Policy With Riders

Life insurance isn’t a one-size-fits-all product. That’s where riders—optional add-ons to your policy—come in. Riders can help tailor your coverage to your personal needs and life circumstances.

For example, a long-term care rider may help cover the cost of extended care if you become seriously ill or injured. A terminal illness rider can allow you to access part of your death benefit early if you're diagnosed with a qualifying condition. If you're leaning toward term life insurance, a return of premium rider may refund your premiums if you outlive the policy term.

Some term policies also include a conversion option, which allows you to switch to permanent insurance later without undergoing a new medical exam. This can be especially helpful if your health changes and qualifying for a new policy becomes more difficult.

These additions can make your policy more flexible and more aligned with your long-term plans.

How to Keep Your Life Insurance Current

Maintaining your life insurance is an important part of staying financially secure. Here are a few simple ways to ensure your policy still matches your life:

• Review your beneficiaries annually. Make sure the right people are listed, especially after major events such as marriage, divorce, or the birth of a child.
• Check your coverage amount. Your financial needs may grow as your income, family size, or debts change, meaning your current policy might need updating.
• Look for conversion options. If you have a term policy, see whether you can convert it to permanent coverage without new medical exams.
• Schedule a yearly policy review. Just like you revisit your budget, savings plan, or investment strategy, an annual life insurance check-in helps ensure everything stays on track.

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