Why Life Insurance Deserves a Spot in Your Financial Wellness Plan

January marks Financial Wellness Month, making it an ideal moment to pause and reassess your long‑term money strategy. While budgeting, saving, and investing usually get most of the attention, one essential piece of the puzzle often gets pushed aside: life insurance. Many people associate it with later stages of life, but the truth is that life insurance can support your financial stability right now and well into the future.

Life insurance helps safeguard the people you care about, brings predictability to life’s uncertainties, and in certain cases, may even contribute to your own financial goals while you’re still around to enjoy them. Below, we’ll break down what life insurance really provides, explore the major types of coverage, and outline how to keep your policy aligned with your evolving needs.

What Life Insurance Actually Does

At its most basic level, life insurance pays out a lump sum—called a death benefit—to the people you designate if you pass away. Your loved ones can use that money however they need, whether that’s covering mortgage payments, paying off credit cards, handling funeral expenses, supporting child care, or simply staying on top of everyday bills.

In other words, life insurance helps keep your family’s financial plan moving forward even if you’re no longer there to provide for them. It creates quick access to cash when it’s needed most, helping turn a stressful and uncertain moment into something a bit more manageable.

You keep your coverage active by paying scheduled premiums. In exchange, the insurance company commits to paying out under the terms of your policy. That assurance and stability are part of why life insurance is considered a key component of overall financial wellness.

Term vs. Permanent Life Insurance

Life insurance generally falls into two main categories: term and permanent. Each option fills different needs, so your choice will depend on your goals, budget, and stage of life.

Term life insurance protects you for a set period—commonly 10, 20, or 30 years. If you pass away during that window, your beneficiaries receive the death benefit. If you outlive the term, the policy ends. Term coverage is often more affordable and is a solid fit for people who want protection during financially demanding years, such as while raising children or paying down a mortgage.

Permanent life insurance stays in effect for your entire life as long as premiums are paid. In addition to lifelong protection, these policies include a savings component called cash value, which builds over time. You can borrow against it or withdraw some of it, though doing so may reduce what your beneficiaries ultimately receive.

Within permanent life insurance, two common options include:

• Whole life insurance: Offers fixed premiums, guaranteed cash value growth, and a preset death benefit. It’s a stable choice for those who like predictability.
• Universal life insurance: Provides more flexibility. You can adjust premium amounts and your death benefit, and your cash value grows based on market conditions. While it offers more control, it can also involve more risk depending on performance.

Both types play an important role for those seeking lifelong protection or those who like the idea of a policy that doubles as a long-term savings tool.

Is a Cash Value Feature Right for You?

Cash value is often viewed as a valuable perk of permanent insurance. Over time, it can be used to help pay for big expenses—college tuition, medical needs, or even certain retirement goals.

However, it’s helpful to know what to expect. Cash value typically grows slowly in the early years of a policy, and withdrawing or borrowing from it can decrease the policy’s final payout. Permanent coverage also tends to cost more than term insurance.

If you already know you need lifelong coverage or you want stable, predictable premiums, cash value can be a meaningful addition. Still, it’s wise for most people to prioritize other savings and retirement accounts before relying on a life insurance policy as an investment vehicle.

Enhancing Your Policy with Riders

Life insurance doesn’t have to be one-size-fits-all. Riders—optional add-ons—allow you to customize your policy so it better supports your unique situation.

For example, a long‑term care rider can help pay for ongoing care if you become seriously ill or injured. A terminal illness rider may let you use part of your death benefit early if you’re diagnosed with a terminal condition. If you’re considering term life insurance, a return-of-premium rider may refund what you paid if you outlive the policy.

Many term policies include a conversion option, allowing you to switch to permanent insurance later on—no new medical exam required. That flexibility can be invaluable if your health changes over time.

These additions can make your policy more adaptable and aligned with both current and future needs.

How to Keep Your Coverage Up to Date

Just like reviewing your budget or investment plan, evaluating your life insurance each year can help keep everything working smoothly.

• Review your beneficiaries annually: Big life changes—marriage, divorce, new children—can affect who you want listed.
• Reassess your coverage amount: Changes in income, family size, or debt may mean it’s time to update your policy.
• Check your conversion options: Term policyholders should confirm whether switching to permanent coverage is available if their needs evolve.
• Conduct an annual policy check‑in: A short review can ensure your coverage keeps pace with your financial goals.

If you’d like help reviewing your current coverage or exploring new options, don’t hesitate to reach out.  Victory Brokerage, Inc is right here in West Chester PA! We’re here to support you as you work to protect what matters most.