Insurance: The most critical part of any financial plan
Insurance: The most critical part of any financial plan
There are 3 types of insurance that everyone needs. Life insurance, permanent disability, and critical illness cover. These are not should haves, they are must haves and without them no one’s financial planning is complete. These things only get more important as an individual takes on more responsibility through their life. Critical Illness and Total Permanent Disability cover are perhaps the most important. What would be the impact of being out of work due to illness? And what would you do if a car accident rendered you unable to physically do your job? Whilst no one likes to think it will happen to them, statistically there is a fairly high chance something serious will happen to us all at some point that will take us out of work for a period of time.
Life Insurance
The value of life insurance cannot be overstated. Life insurance not only offers protection for your family and home in the event of your death but can also be used as an invaluable tool in your financial planning. Some people may think of life insurance as just another expense. The question you need to consider is would someone in your life suffer an economic hardship if you were to die?
If you’re married and have young children at home who depend on your income, you have a clear need for life insurance. If you were to die, the loss of your income could cause an immediate financial hardship. Even if one spouse is a stay at home parent and doesn’t bring in a formal paycheck, his or her death means that the surviving spouse will have additional expenses such as child care, cooking, and housekeeping — all necessary services for running a household. If your spouse or significant other depends on your income to keep the bills paid and to run the household together as a joint venture, then having the financial safety net of a life insurance policy is vital.
The loss of a loved one is an emotional and traumatic experience for any family. But not having enough money to meet immediate and ongoing living expenses, can make a very difficult situation even worse. Not only are the people you love grieving your loss, but they’ll now have added financial stresses to cope with.
Originally published at https://hoxtoncapital.com on June 30, 2021.
