Life Insurance During a Recession—Is It Really Necessary?

Life can have its ups and downs, but so does the economy. Gas prices, grocery prices and the cost of almost everything seem to be on the rise lately. You’ve probably heard talk about the possibility of a recession as things get more expensive. But what exactly is that, and how can you justify paying for it? Insurance times like these?

What exactly is recession?

A recession is defined as a significant decline in economic activity that lasts for months or sometimes years. Depending on your age, you may have seen many of them in your lifetime. On the other hand, you’ve also lived during a period of economic expansion, which is when the economy grows for two or more consecutive quarters.

However scary as recessions may seem, they are considered an inevitable part of the business cycle and along with expansions form a regular cadence that occurs in economies around the world. Our economy expands and contracts on a regular basis due to the performance of national and international markets. We notice it more, though, when the economy takes a downturn and household budgets are pushed to the limit.

Your life insurance should not be included in the cost reduction.

If Cost Sounds like a good place to take the life insurance deduction, think again. A temporary economic downturn probably isn’t a good time to stop protecting your loved ones. If the unforeseen were to happen, would they be able to maintain their current lifestyle without the help of your life insurance policy? Will they be able to bear the financial burden of your final arrangements amid rising costs and fees? These are just a few of the things you should consider when making budgeting decisions. Is sacrificing your peace of mind really a smart choice?

Let’s face it—it’s easy to spend $100 or more each month stopping at the drive-thru for coffee or fast food. You may have never considered life insurance because you think it comes with a high price tag. It will be 2 to 3 times as expensive as most people believe More In fact, life insurance is actually quite affordable when compared to what it actually does. According to 2022 Insurance Barometer Study80% of people overestimate the cost of life insurance. Don’t let this common misconception stop you from getting the coverage you need.

You cannot put a price on trust.

Life insurance is all about knowing that if something happens to you, your loved ones will be supported. How does it feel to have the confidence that no matter what happens to you, the people who matter most will have financial security? It is most important to keep these types of thoughts in mind. They allow you to sleep peacefully at night knowing well that you did everything you could to help ensure quality of life for your loved ones.

Not covered yet? Let’s take care of this.

If there’s one thing the past few years have taught us, it’s to expect the unexpected. With this in mind, now is a good time to consider purchasing life insurance if you do not already have coverage.

your life insurance options depend on both your budget and your needs. If you only want to cover your final expenses, your costs are likely to be lower because your needs are different from someone who needs to provide for the future of their spouse and children.

Different insurance carriers offer many different types of life insurance products to choose from, but most life insurance can be defined as term or permanent.

  • Term life insurance provides you protection for a specific period of time. If you die during that time, your spouse or other beneficiary will receive a specified amount as the death benefit.
  • Permanent life insurance has no specified term as it is designed to cover you for the rest of your life. Although generally more expensive, permanent life insurance has affordable options that not only provide a death benefit but can also provide cash valueUnlike term life insurance.

Some final food for thought.

It’s understandable that rising prices can be a cause for concern, but here’s a tip for those who want to maintain a more consistent budget: Look at level-premium insurance. Level-premium is a type of term or permanent life insurance where the premium remains the same throughout the life of the policy. If you want to lock in a rate for the duration of your contract, this type of policy is worth your consideration. With this type of coverage, premiums will never increase and are guaranteed to remain the same throughout the term of your contract.

This is just one of the many life insurance options available, and an agent can help you find the policy that best suits you. Talk to an insurance professional or use Life Happens’ Handy agent locator to find one near you.

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