Many families feel the need to cancel their life insurance when the economy slumps as a money-saving measure. The monthly premium can put some money back into their pockets to help pay for other things, but is canceling a life insurance policy really the smart thing to do? Let us take a closer look to help you make this assessment.
The simple answer is no. In fact, during a recession, and at times when companies are laying off workers by the droves, it is probably best to view life insurance as a higher priority. The school of thought is this: if you are having trouble paying for life insurance during an economic slump or recession, just think of how tough it will be for your survivors if you are not there anymore.
Buy Individual Life
Many workers through larger companies are provided a group life insurance benefit. This is usually a term life insurance and it is a nice benefit to have – as long as you continue working for the company. But what if you are laid off? Your group life insurance will be canceled as well.
Instead of depending upon group life insurance, it may be best for you and your family to purchase your own individual life insurance. You may keep the group life as a supplemental policy as long as you continue to work, and if you ever become laid off you can always add more benefit to your individual policy.
Switch to Term
There are many types of individual life insurance products. Some have a savings feature that requires an additional premium each month. If you currently are paying more than you feel you can afford for a Universal or Whole life insurance policy, consider switching it to a term policy.
Additionally, most companies will allow you to make the switch and even transfer the savings you have built up over as payment of the term premium. Term life can be extremely affordable and help put more money into the budget for other important expenses.
