During an economic downturn, many families look for ways to reduce or cut expenses. Perhaps your daily latte is the first victim of your budget cutting. Maybe you’ll start carpooling more and renting videos instead of going out to the local movie theater. Or perhaps, according to a recent article in the Pittsburgh Post Gazette you might be like 27 percent of families that would or have canceled their life insurance policies.
While most would survive without the daily lattes and watching movies at home doesn’t have quite the excitement of seeing the latest blockbuster on the big screen, canceling a life insurance policy could prove to be a recipe for disaster, according to the LIFE Foundation. “Without life insurance to replace the income a family depends on, they are going to be worse off than before,” said Marvin Feldman, chief executive officer of the Life Foundation in Arlington, Va., a nonprofit insurance education organization.
Before you cancel your life insurance policy, you have to ask yourself the difficult question, if times are difficult now, what would it be like for my family if I were to pass away and leave them without the financial protection of a life insurance policy?
Rather than eliminating life insurance from your budget, perhaps you can look at ways to reduce the premiums you pay. Term life insurance premiums are at an all-time low. When was the last time you researched rates? Maybe you can reduce premiums by purchasing a new policy and replacing your old, more-expensive policy. A review of your current needs might also reveal that you are over-insured and should purchase a policy with a lower benefit or shorter term period.
Include life insurance in your revised budget and you will be keeping a very important safety net in place for your family. And if you save money by finding a lower-cost policy, celebrate and have that latte.