If you’re looking to trim your expenses responsibly in 2026, consider looking at your insurance policies.
There are some types of insurance that most Americans can’t do without. After all, if you have a car, auto insurance is a legal requirement to drive in almost every U.S. state. And, having homeowners insurance can protect your assets from fire, weather damage and other threats. It’s also typically a requirement if you have a mortgage.
However, not every type of insurance is suitable for every person. “Insurance tends to work best when you’re using it to transfer risk,” said Riley Saunders, a certified financial planner at Cassaday & Company, Inc., an investment management and financial planning firm. While it may make sense to offload some risks to an insurance company, there may be other moves to make instead.
Here are three insurance alternatives to consider in the new year.
Consider these insurance alternatives in 2026
Get term life insurance instead of permanent
If you need life insurance, chances are an affordable term life insurance policy could be a good fit over permanent. “Term life insurance is the cheapest and most simple option,” Saunders said. “There aren’t a lot of bells and whistles, but it pays out the largest benefit for the cheapest amount of money.”
While a healthy 30-year-old male can get $500,000 of term life coverage for about $30 a month, a permanent policy with the same coverage would cost the same person over $470 per month, according to Policygenius.
Permanent policies are guaranteed to pay out when you die, and typically have an investing component. However, these factors also contribute to the high premiums and fees, Saunders said.
Permanent policies can be a good fit if you’ve already maxed out retirement accounts, want to pass money to heirs or own a business. But a budget-conscious family might find a term policy more useful.
Term life insurance is relatively straightforward and very affordable. CNBC Select has previously recommended Ladder and Amica for their policies with affordable premiums, flexible terms and easy online applications.
Ladder Life Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Ladder is a digital-first life insurance company offering up to $3 million in coverage without an exam. It only offers a single term life insurance policy without riders, but Ladder’s policies offer the option to increase or decrease coverage as your needs change.
Amica Life Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Amica offers four straightforward life insurance options — a level term life insurance, and whole life insurance policies payable for 20 years or until ages 65 or 100. Both term and whole life insurance policies include a terminal illness rider for free, allowing for an advanced death benefit if the insured is diagnosed with a terminal illness.
Additionally, you can often skip adding extra riders. One common example is accidental death and dismemberment (AD&D), which raises your benefit amounts for certain scenarios. And, some people already have it without knowing. “That’s commonly something that’s provided through your employer,” Saunders said.
Save more instead of buying an annuity
But annuities may not be right for everyone. “There can be riders or fees that draw up the total expense of an annuity,” he added.
Instead of buying an annuity, investing more for retirement in an alternative way could be beneficial. A Roth IRA can help you see tax-free growth and withdrawals after age 59.5. In 2025, those who make less than $150,000 as a single tax filer, or less than $236,000 when filing jointly, can contribute up to $7,000 to an IRA, and those who are age 50 or older can contribute an additional $1,000 per year
Skip burial insurance and save instead
These policies typically cost $50 to $100 per month for $10,000 in coverage, according to insurance agency Choice Mutual. While that may be affordable, it may not be necessary—especially if you have the funds to cover these expenses.
Instead, consider putting that money aside in a savings account. Using a high-yield savings account can help these funds grow by earning more interest than a standard savings account, while remaining highly liquid and available when needed.
By setting aside funds for these expenses on your own, you’re preparing your loved ones with the money they may need.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every insurance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. To research the best life insurance companies, we compiled dozens of data points on more than a dozen life insurance companies. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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