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  • Writer's pictureScott D. Guldin

Why do you need life insurance during a recession?

Too few Americans understand personal finance fundamentals.

Life insurance is typically a product many people want to talk about when times are good. Their jobs are doing well, their debts are in check, and they want this to continue for their family in case of their untimely death. But what happens when we are faced with a recession in America?

Permanent life insurance such as whole life, accumulates cash value while providing a death benefit.

We have already seen prices skyrocket over the past two years and this coupled with the corona virus pandemic has really taken its toll on family economies. So why do we need life insurance during a recession?

First the obvious, it provides financial protection to your loved ones in case of your untimely death. This is especially important if you are the primary income source of your family. What financial position would your family be in if your income stream had suddenly stopped, and you did not have life insurance. The bills and needs of your family continue. The bills for their mortgage, utilities, school loans, car payments/insurance, food, etc. keep coming. Life insurance can help cover the financial hardships left with your family in the event of your untimely death.

Permanent life insurance such as whole life, accumulates cash value while providing a death benefit. This is a particularly important point because this is a Living Benefit, meaning a benefit while the insured is still alive! During a recession your investments will experience a lot of negative volatility, but not the accumulating cash value of your whole life insurance policy. So, if you were retired or in a financial bind and needed cash, your depleted investments would be one of the last places you would want to withdraw money from. Why? Because withdrawing money from these investments while they were down would further compound your problem and you would deplete your investments much faster. This would not give your investments time to make a “comeback.” Cash value gives you a means to income without depleting your investments.

Many families are looking to cut expenses during a recession and if they own a life insurance policy, it is often looked at as a luxury expense and one of the initial “costs” to be eliminated. People feel they will buy a new one when they get their finances back to where they want it to be. One thing this world has proven to everyone is that it is unpredictable. Are you going to be healthy enough, down the road to qualify for a policy? Or what if you pass away before you had time to purchase a new policy? Expenses during a recession is something every family needs to review but are the risks of not having a life insurance policy worth the budget cut?

Talking to an experienced and qualified agent on what product and strategy would fit your needs and budget is the first step. Whether you are uninsured, under insured or concerned with the uncertainty of the stock market, we have an alternatives that can work for your financial plan that you will not hear about from most financial advisors. Please contact me at (724) 516-7952 or email me at to schedule a free, no obligation appointment. Initial meetings are conducted over the internet to maximize your availability and convenience.


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