While your natural reaction upon hearing the word “recession” might be to pull back on everything, there’s a chance that might not be the best course of action. In fact, in a recession, it might be the perfect time to learn about life insurance and what it can do for you during these trying times. Here’s what you should know.
Life Is Unpredictable
You likely understand why it makes sense to get life insurance during normal times.
If you have a family — people who depend on you for income — then life insurance will help provide them with financial security in the event of your passing. What you might not know, however, is that having a life insurance policy in place before an economic downturn is still smart thinking, since it continues to serve as that crucial safety net.
For starters, think about it like this — during a dip, there’s a greater risk of financial hardship befalling your family. In such a case, if anything were to happen to you, it would potentially leave your family in a sticky situation. Life insurance is a way to safeguard you and your loved ones against that potential future outcome.
For instance, life insurance would help your family continue with home payments after you’re gone (critical if you are the primary earner and your family would have trouble keeping up with a mortgage or rent). What’s more, life insurance can be a way to help your family pay off debts or deal with unexpected expenses down the line.
Buying Insurance Mid-Recession
You might think it impossible to get life insurance during a recession, but the truth is you can still apply and retain a policy, provided you can keep paying your premiums. If you’re worried about rates increasing substantially because of a recession, you should take comfort in the fact that this is not necessarily going to be the case.
Recessions don’t have nearly the impact on policy rates as people assume that they do, and most increases, if they do happen, are incremental raises that occur after the recession has dragged on longer than anticipated. Again, though, this is a rare occurrence.
As for those who already have life insurance, rest assured that your premium won’t increase just because a recession hits. In fact, if a recession impacts your ability to pay your premiums, you can sometimes work out a premium relief program with your insurer to accommodate your new circumstances until things are back to normal.