Many people ignore insurance. They are not familiar with the different benefits they can get from buying life insurance. They feel like they are only losing money if they spend money to buy insurance. In the world of personal finance, insurance plays a very important role.
In personal finance, we commonly talk about saving money, budgeting money, and even how we should spend our money wisely. Those are just basic things to talk about in personal finance. We should also talk about emergency funds and insurance.
Emergency funds will not be discussed in this article. I think you will prepare your emergency funds before you invest your money. I’ll give you some reasons why insurance is very important, life insurance in particular. Are you ready?
Investing is very exciting and rewarding. But don’t jump into investing right away unless you have emergency funds and, above all, health and life insurance.
Life insurance is very important because it serves as income protection for the entire family that is financially dependent on the breadwinner. If the breadwinner of the family is insured and passes away, the family will not suffer financially as they can have the money to survive.
In the world of insurance, the money that family members or beneficiaries receive is known as “benefits.” The insurance company will deliver an exact amount of money to the beneficiaries of the insured.
Most of the time, the beneficiaries are those people who are financially dependent on the insured. Therefore, if there are people who are financially dependent on you, you should also immediately purchase a life insurance policy.
Okay, enough about the benefits. Let’s learn the reasons why you need to buy life insurance before you invest any money.
Your investment funds are not enough to help your loved ones financially. The ideal coverage or face value that your beneficiaries should receive when you die is the equivalent of 3-5 years of annual income.
Example, if your annual income is one hundred thousand dollars ($100,000), your beneficiaries should have half a million dollars when you die.
If you’ve just started investing money and your funds total $75,000, your family will be in financial trouble if you die.
Life insurance is one of the important things to consider before investing money. Do not ignore it. Don’t be in a hurry. Plan your investment plan carefully and one of your investment plans is to protect your income first. I hope you have learned something today. If you have any questions or want to know more about investing, you can read blogs, ask questions on forums, or attend investment seminars.
