Life has a way of taking its own path, no matter how carefully we plan our moves and prepare for the future, and that’s especially true when you have kids. During financial hardship, you might find yourself deciding between maintaining your life insurance coverage and putting food on the table. It’s good to know a few solid life insurance tips for keeping your coverage while getting back on solid financial footage for yourself and your family.
Review Your Policy
Even if you aren’t going through a financial hardship, it’s a good idea to meet with your agent to look over your policy to see that you’ve got coverage that meets your needs and to see if there are any new discounts for which you might qualify. For instance, if you’re in better health than you were in when you originally got your life insurance policy, you might qualify for lower premiums. You might also have less debt now, which can also lower your premiums.
Reduce Your Coverage
If your physical and financial health are unchanged, or if you don’t qualify for new discounts, you might want to look into lowering your policy coverage. Reducing your coverage is often easier if you have term life insurance rather than whole life coverage. Know that it’s possible for you to regain your original death benefit later when you’ve made a financial recovery.
It Might Be Less Expensive Long-Term to Keep Your Coverage
While it’s undoubtedly true that you can save money by dropping your life insurance now to give yourself one less thing to pay for at the end of the month, it’s also true that you can make things harder on yourself if you decide to reinstate your policy in the future. This is because the older you are, the higher your risk of dying and your insurance company having to pay out a benefit. While keeping your current policy and paying the same premiums won’t make it more affordable now, it can make it more affordable than reinstating coverage later.
See If Your Employer Offers Life Insurance
If you can’t afford a life policy on your own, you might be able to with the help of your employer. Know that your employer’s life policy will only last as long as you’re a company employee, but that trade-off can give you peace of mind and improve your financial situation as well.
Look Into Using Your Policy’s Cash Value
Do you have a whole life policy you’ve had for several years? If so, it likely has accumulated cash value, which you can tap into to cover the costs of your premiums for as long as your cash value allows. Be sure you talk with your agent about the consequences of using your cash value and any other effects you can expect.
Consider Dropping Some Policy Riders
You can also talk with your insurance agent to see what, if any, riders your policy has, such as dismemberment or accidental death. Such riders increase the price of your premiums, and working with your agent to decide which you may not need can go a long way in lowering your monthly insurance costs.
When financial times get tough, insurance is sometimes the first thing on the chopping block. Use these tips to maintain your life policy as you work through your current hardship.