Reduce your budget Not Your Insurance

There is no doubt that the recession has wreaked havoc with the household budget of most Americans. Revenue declined as prices rose, with "robbing Peter to pay Paul" a frequent, if desired, the activity every payday. As times get harder, you may be looking for ways to get your budget under control, evaluating each line item to see if it can be reduced or possibly even eliminated.

Although there are some places to reduce your insurance coverage should not be one of them. If you plan to cancel your life insurance policy to add a few dollars to your bank account, consider these points:

• Chances are when you took the policy, you were healthy. Can you guarantee that the same will be true a few years from now, when you decide that you can afford to buy insurance again? If an unexpected illness occurs, the insurance coverage may not be an option.
• If you are between 25 and 44, you might think you have plenty of time to worry about what would happen to your family when you die. But according to figures from CDC to 2010, about 112,178 of those who died were in the same age group, officials accidents by more than 34% of them.

However, knowing all the reasons to keep your current policy does not solve the economic problem. But a meeting with your insurance advisor can provide you some options. Start by discussing the situation and whether it is a temporary problem (you are between jobs, for example) or something more serious, such as a terminal illness.

In the latter case, your policy can allow you to enjoy an accelerated death benefit, where you can draw some or all of the death benefit for managing current expenses, with the remainder provided your beneficiaries upon your death. This can be very useful if you are unable to work and family depend on your income to pay the mortgage, for example.

Other possible solutions, depending on your situation, may include borrowing against your policy or allocating its cash value to pay premiums, which keeps in force. (Keep in mind which could reduce its cash value and amount of the death benefit.) Some policies come with flexible premiums, allowing you to pay more or less, or even skip premium. Even change the way you pay the premium monthly or quarterly rather than annually, can give you a little breathing room.

Other solutions offered by the website of the Insurance Division of the Oregon include conversion of your policy plan paid the policy, the death benefit reduction to reduce the amount of your premium payments or even ask your recipients to help them pay premiums so they can keep the financial protection you want for them.

Once you and your adviser have agreed a viable solution, it is time to take a hard look at your overall household budget. Look for areas where you can shave some of your outgo and save a little for unforeseen expenses. It is what money guru David Bach designates as taking Latte Factor-money spent on "small" wasteful spending and put it in your savings account. Just $ 5 per day the price of a latte in most regions may add up to an impressive $ 1,825 per year stashed away for a rainy day!

The key is to make the right choice not only for the immediate future but also for the long term. You made a wise decision when you bought your policy. Make another smart solution to keep strength for you and those you love.