Insurance is designed to protect an individual and  family from disasters, acts of God and serious financial burdens. There are various kinds of insurance of which, the most basic and most important is considered to be life insurance. Life insurance provides for the dependants in the event of your death.

Throughout life, there are certain financial commitments you need to meet. In order to contribute in some way to the family income, you need to provide something even in death—to secure the home for the dependants that you leave behind, help the family meet expenses for a while, protect dependant parents, or secure the children or spouse.

Your financial obligations could include meeting the college expenses of the children, outstanding medical expenses, legal bills, mortgages, business commitments, and so on.

I don’t want to tell you how much insurance I carry with the Prudential, but all I can say is: when I go, they go too.

Jack Benny

How much insurance you’ll need would vary from one individual to another depending on financial needs and sources of income, financial obligations, debts, and the number of dependants. An insurance adviser or agent would usually recommend that you undertake insurance that amounts to five to ten times your annual income.   The best thing to do would be to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you.

As an important part of your financial plan insurance provides peace of mind for any uncertainties in life.

1.         Life insurance correctly planned will on premature death provide funds to deal with monies due, mortgages, and living expenses. It offers protection to the family you leave behind and serves as a cash resource.

2.         It secures your hard earned estate on death by providing tax free cash which can be utilized to pay estate and death duties and to tide over business and personal expenses.

3.         Life insurance can have a savings or pension component that provides for you during retirement.

4.         Some policies have riders like coverage of critical illness or term insurance for the children or spouse. There are certain rules regarding eligibility for riders which you will need to determine clearly.

5.         Having a valid insurance policy is considered as financial assets which improves your credit rating when you need health insurance or a home loan or business loan.

6.         In case of bankruptcy, the cash value as well as death benefits of an insurance policy is exempt from creditors.

7.         Life insurance can be planned such that it will cover even your funeral expenses.

8.         Term life insurance has double benefits, it protects and you can get your money back during strategic points in your life.

9.         Insurance protects your business from financial loss or any liabilities in case a business partner dies.

10.       It can contribute towards maintaining a family’s life style when one contributing partner suddenly dies.

Insurance is vital to good financial planning and security but you would need to assess your personal risk and long term commitments. Insurance stands a person in good stead throughout life and can be used in case of emergencies during a life time by requesting a withdrawal or loan.