Many people ignore insurance. They don’t know the different benefits they can get from buying life insurance. They feel like they are only losing money if they spend money on buying insurance. In the world of personal finance, insurance has an important role.
In personal finance, we usually talk about saving money, budgeting money, and even how we should spend our money wisely. These are just the 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 will give you some reasons why insurance is very important, especially life insurance. Are you ready?
Investing is very exciting and rewarding. But don’t get into investing right away unless you have emergency funds and most importantly health and life insurance.
Life insurance is very important as it serves as income protection for the whole family who are financially dependent on the breadwinner. If the breadwinner is secure and he dies, the family will not suffer financially since they can have the money to survive.
In the insurance world, the money that family members or beneficiaries are called “benefits”. The insurance company will remit an exact sum of money to the beneficiaries of the insured.
Most of the time, the beneficiaries are the people who are financially dependent on the insured. Therefore, if there are people who are relying on you financially, you should also take out a life insurance policy immediately.
Okay, enough about the benefits. Find out why you should buy life insurance before you invest any money.
Your investment funds are not enough to financially help your loved ones. The ideal coverage or face amount that your beneficiaries should receive upon your death is equivalent to 3 to 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 upon your death.
If you’ve just started investing and your funds are $ 75,000, your family will be in financial trouble if you die.
One of the important things to consider before investing any money is life insurance. Don’t 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. Hope you learned something today. If you have any questions or want to learn more about investing, you can read blogs, ask questions on forums, or attend investing seminars.