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Wednesday, 13 March 2013

What Completes a Personal Financial Planning

By Jose Y. Sykes


In life, things are hard and you can never too certain about the future, even if you are wealthy today. To make sure that all you hardly worked for your entire life will eventually pay off even when bad things happen, it will be a great act to get the best kind of personal insurance that will suit your needs and more importantly your budget.

Tragedies and financial problems are two of the worst things we can expect. That's why insurance is designed to protect you and your loved ones from them. It has different kinds but the basic and the most important to consider is the life insurance. Its purpose is to provide for your loved ones after your death.

Since there are financial commitments you need to throughout life, personal life insurance is very much important. You also have to contribute in some way to your family income and you have to provide something even in death - help your family expenses, secure your home, assist dependent parents or secure spouse or children.

Besides, you will also have financial obligations such funeral expenses, mortgages, business commitments, unresolved medical bills and so on.

How Much of Insurance Do You Need?

Before deciding about your personal insurance, the best thing you can probably do is to ask advice from an expert on what kind of personal financial planning is best for you and why you should consider insurance. This is because the amount of insurance you will need would vary depending on several factors - lifestyle, your sources of income, debts or in some cases number of dependents. Most often, he would recommend that you take insurance that amounts five to ten times your yearly income.

Ten Importance of Life Insurance

1. On premature death, a well planned life insurance can provide funds to settle the expenses such as mortgages and living expenses. It gives protection to your family you left behind. Life insurance serves as a cash resource.

You can have a savings or pension component from your life insurance at the time you retire.

There are some insurance policies that have provisions like term insurance or health insurance for the spouse or children.

4. A valid and reliable life insurance policy can be considered as a financial asset because it can improve your credit rating when you need home and business loans as well as health insurance.

5. Because it can be planned, life insurance can cover even your funeral expenses .

In case of bankruptcy, your insurance policy's cash value and death benefits is exempt from creditors.

7. Aside from the protection insurance gives, you can also get your money back during tactical points in your life.

8. Life insurance can contribute to the maintenance of your family's lifestyle in case one of the partners dies.

9. It can cover even your funeral expenses because it can be planned.

It can protect your business from financial loss or any liabilities when one business partner suddenly dies.

To have an outstanding and secure personal financial planning, the role of life insurance is huge. Meanwhile, you have to be aware and have an assessment of the personal risks as well as the long-term commitments you have to take.




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