When times get tough, a downward economy can play havoc with the typical American household budget. In recent years, incomes have gone down, unemployment has gone up and prices are out of control. When the recession affects so many families, everyone begins looking for ways to tighten the belt, decrease the budget and cut out unnecessary spending. Each line item gets scrutinized to try and stretch the dollar a bit further this month than we did last month.

Don't Cut Life Insurance From Your BudgetUnfortunately, many families consider life insurance a luxury, something that is first on the chopping block to get cut back when the economy turns. If you have considered canceling your life insurance policy to add a few more dollars to your bank account, consider the fact that insurance only increases with time. If you cancel your life insurance today, the same policy will cost you more next year, even if your health hasn’t changed. If an unexpected illness occurs, insurance coverage may no longer be an option.

Many young people cut out life insurance, considering it an unnecessary expense. If you’re between 25 and 44, and you’re considering cancelling because you might think you have plenty of time to worry about that later remember that the CDC figures approximately 112,178 of those who died in 2010 were in your same age bracket. Thirty-four percent of those were due to accidents, not illness or disease.

If your family is having a hard time putting food on the table and keeping the roof over their heads, they will have an even harder time paying for funeral expenses while fending off creditors.

There are additional options to help your pocketbook and keep your insurance policies. For example, if your economic situation is due to a terminal illness or another equally serious situation, consider an accelerated death benefit. This is one where you can draw some or all of the death benefit to handle current expenses. This can be very useful if you are unable to work because of health circumstances, but doesn’t help those who are laid off.

Other possible solutions, might be borrowing against your policy, taking advantage of flexible premiums, or changing how you pay your premiums from monthly to quarterly rather than on an annual basis, which avoids one big bill due all at once.

In dire circumstances, you can even consider asking for help from your life insurance beneficiaries. Oftentimes, they may be willing to help you in tough years to ensure the policy stays in place.

The key is to make the right choice for not only the immediate future and your current budget but to keep the long term picture in mind. It is always a wise decision to invest in an insurance policy; it is an even smarter decision to do everything you can to keep it in force.