As families struggle with the harsh realities of today's rough economy, many are forced to make tough decisions about what things they can do without.

Along with cutting back on movies, clothing, eating out and travel, a number of households are prepared to eliminate their life insurance policies in an effort to make ends meet, according to a survey by the nonprofit LIFE Foundation.

More than a quarter of adult Americans -- 27 percent -- reported that they would cancel their life insurance policies to save money during a family financial crisis, a move the LIFE Foundation warns could be a recipe for disaster.

"Without life insurance to replace the income a family depends on, they are going to be worse off than before," said Marvin Feldman, chief executive officer of the Life Foundation in Arlington, Va., a nonprofit insurance education organization.

The life insurance survey provides another snapshot of the tough new financial landscape families are facing -- and could be an omen of more trouble ahead for dependents who may have no support in the event of a breadwinner's unexpected death.

Those who are considering dropping their life insurance policies should consider the consequences before making the decision. Their rates may go up if they reapply for coverage. They may have to retake a medical exam to restart coverage. They might even sacrifice some of the cash value they've earned over time in permanent life policies.

"The consequences of cutting back on life insurance could be catastrophic in case of an unexpected death; however, that doesn't mean you shouldn't re-examine your life insurance program," said Carrie Coghill-Kuntz, president of the financial advising firm DB Root & Co., Downtown.

Whole life insurance policies that build cash value are more of an investment than pure life insurance protection and can be more expensive. Families that have whole life policies could switch to less expensive term life policies. "But make sure you qualify for the less-expensive alternative before canceling what you already have," Mrs. Coghill-Kuntz said.

Unlike homeowner's and automobile policies, life insurance is not a form of insurance most people are required to have, which makes it more vulnerable to being canceled when owners feel they can't afford it.

"It's not something people can see, feel or touch. It's not even something they think about until they have to use it," said Thom Fox, community outreach director at Cambridge Credit Counseling in Agawam, Mass.

"They see life insurance as valuable. But if they aren't making ends meet, they'll use the life insurance money to meet immediate obligations. People are focusing right now on today."

Part of the reason consumers have cut back on spending is that many are putting more of their money into savings and paying down their debt as the weakened economy has forced them to hunker down.

A financial behaviors index published by First Command Financial Services in Fort Worth, Texas, shows a significant downturn in consumers' feelings of financial security and optimism.

The index, which is based on monthly interviews with 1,000 U.S. consumers, fell to a record low of 85 in September as consumers responded to the stock market turmoil by saving more and cutting debt.

"When we see attitudes get very pessimistic as they have, people tighten their belts," said Scott Spiker, chairman and chief executive officer of First Command Financial Services. "They try to make themselves more financially secure.

"People have had a pretty precipitous decline in how they feel about their financial well-being and ability to retire comfortably. Without knowing where the market will end up, they pull any lever they can to get into a place of financial control."

However, the changes in behavior may be short-lived.

The most recent index showed consumer intentions fell by 10 points, suggesting consumers might do less saving and debt paying next quarter.

That doesn't surprise Daniel White, president of Daniel A. White Associates in Glenn Mills, Delaware County.

"People will fall back to their old patterns," Mr. White said. "People have short memories. As soon as things turn around, they'll be out spending money again. It will happen as soon as they feel their jobs are secure and the economy is back on track."

Meanwhile, families around the world are taking a harder look at their life insurance policies, according to a British research firm called uSwitch.com.

The company found 42 percent of consumers in the United Kingdom who participated in their study reduced their investments in insurance products. Of the 42 percent, 15 percent dumped private medical and dental policies, while 13 percent let go of life insurance policies.

Scott Crawford, chief executive officer and founder of DebtGoal.com, an online program that helps people reduce their debt, said that as short-term survival needs become more pressing, some people get less concerned about what will happen next year, and that that often translates to eliminating life insurance.

But single people with relatively few obligations may find canceling life insurance to be a smart decision, Mr. Crawford said.

"Life insurance is a peace-of-mind product," he said. "For a lot of people today who wake up stressed, the peace-of-mind factor has changed. It's not about long term anymore. It's about short term, and for single people the change in thinking is even greater.

"They don't have family obligations or long-term commitments; so for them it can be an easy choice to drop life insurance. You could make a pretty [good] economic decision that young people don't need life insurance unless they have kids."