Many people ignore insurance. They are not familiar with the different benefits they can get out of buying life insurance. They feel like they are just losing money if they will spend money for buying insurance. In the world of personal finance, insurance has a big role.
In personal finance, we are commonly talking 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 discuss in this article. I believe you will prepare your emergency funds before you will invest your money. I will give you some reasons why insurance is very important particularly life insurance. Are you ready?
Investing is very exciting and rewarding. But don’t dive into investing immediately unless you have emergency funds and most of all – health and life insurance.
Life insurance is very important because it serves as an income protection for the whole family who rely financially to the family’s breadwinner. If the breadwinner is insured and he died, the family will not suffer financially since they can have the money to use to survive.
In the world of insurance, the money that the family members or beneficiaries are known as the “benefits”. The insurance company will give an exact amount of money to the beneficiaries of the insured person.
Most of the time, the beneficiaries are those people who rely financially to the insured. Therefore, if there are people who rely to you financially, you should also immediately purchase life insurance policy.
Okay, enough talking about the benefits. Let’s know the reasons why you need to buy life insurance before you invest money.
Your investment funds are not enough to help your loved ones financially. The ideal coverage or the face amount that your beneficiaries should receive when you died is amounting to the equivalent of 3 to 5 years annual income.
Example, if your annual income is one hundred thousand dollars ($100,000), your beneficiaries should have half million dollars when you died.
If you are just started investing money and your funds is amounting to $75,000, your family will be in financial trouble if in case you died.
Life insurance is one of the important thing to consider before investing money. Don’t ignore it. Don’t be in a hurry. Carefully plan your investment plan and one of your investment plan is to protect your income first. I hope you learned something today. If you have any questions or want to know more about investing, you can read blogs, ask on forums or attend investing seminars.