Most people know that they must have insurance to pay for the initial one-time costs such as a funeral, taxes and their debt, (mortgages and loans).  Others will go a step further and plan for the ongoing expenses that will continue after their death to provide for their spouse and children.

If you are retired, I am not saying you should run out and get insurance.  Insurance is something that most would have purchased when they were young, and the premiums were at their lowest.  Many retirees use insurance for tax planning to pay for capital gains tax that their estate will owe upon their death, and this is something that should be discussed with your advisor to see if it is worth the cost.

Insurance is definitely something you need during your working years when you have consumer debt and a young family.  There are many types of insurance.  The basics are for income protection, mortgage insurance and survivor benefits.  Most people have life and disability insurance with their employer which is a very inexpensive way to acquire coverage.  It is easy to setup an automatic withdrawal from your pay that can provide additional insurance often times for your spouse and children as well.

Christine’s Tip:

Planning for the future should always include the planning for possible unexpected events.  Avoid the temptation to put your plans on autopilot.  It is important for you to have a well thought out strategy that provides for the loss of income and protection against the unexpected.  This means you must have a Will, a Power of Attorney, and Insurance.  Don’t make foolish decisions to not protect your family and your assets to save a couple dollars.  It’s not worth it.  Smart financial planning means you should never leave yourself unprotected.  Really, this is the only way you can ensure the stability of your family should you die unexpectedly.  It is your responsibility to have your say in your Will, to ensure your requests are known and acted on in your Power of Attorney, and to ensure your family is not destitute by having life insurance.