Question

Discuss the role that insurance plays in the financial planning process. Why is it important to have enough life insurance?

Using this statement and this question and other details easily found in the textbook, and your own experience to participate with your response using at least 150 words.

Answer 1

Insurance plays a very important role in the financial planning process. Insurance is what insures you in the event something unexpected happens. There are different types of insurance and as the person gets to different age group, he should have insurance according to his needs. Some needs can be in the form of health insurance, some can be in the form of term insurance or life insurance and other types of insurance which protects the individual in the event something unexpected happens. The life insurance or term insurance is important from the perspective of the family members who are dependent on you. In the event that something happens to you, your family might face financial difficulty issues and for that you take term insurance, so in the event you are met with death unexpectedly then your family financial needs can be taken care of. The insurance besides giving a financial stability also helps in planning systematically for retirement where people can take different forms of plan to take care of their income needs in the old age.