Saving money is difficult no matter where you are in your financial life. A good savings plan requires more than a budget and goals. It also requires a disciplined attitude towards keeping your finances in order, working towards reaching goals and avoiding impulse purchases when savings begin to accumulate. Protecting your cash from the unexpected is one of the most important things you can do once you begin saving money. Insurance protects your savings and preserves it for the intended purpose.
You’re investing every time you spend money. You’re investing your money in an item you expect to return, whether you purchase a house or a car. Either the asset’s value will appreciate or the item’s actual use and ability to improve your quality of living, you can expect a return.
If one of these items is damaged in an insurable event and you don’t own insurance, you will need to take money from your savings to replace it. This not only reduces your savings, but also decreases any asset appreciation you may have gotten from the item. Proper insurance will ensure that your property is not damaged by a covered peril. You can instead rely on your insurer to replace the item or pay its actual value.
Your savings should be at least partially intended to leave a legacy for your heirs. This legacy could be used by your heirs to start families, go to college, or pay the taxes due to you. It is difficult to save money for a legacy.
- It may be difficult to save enough money to leave the legacy you desire for your heirs within the limits of your future and current salaries.
- You may not be able to enjoy a comfortable retirement if you want to leave a legacy.
A life insurance policy can be a great tool for legacy planning because it provides a unique set of funds that are exclusively dedicated to legacy planning. This allows you to leave a legacy that is more affordable while also saving money for other savings goals.
Maintaining an income
What would happen to your savings plans if you lost income due to a short- or long-term disability? Your ability to save would be affected if you lost income during a disability. It would also make it very difficult to start saving again once you have recovered and are able to work again. You can still earn an income even if you are disabled. A disability policy will reduce the need to dip into savings accounts. Although you might not be able make any additional contributions while you are receiving disability benefits, you can at least keep your savings separate from the money you need to support your family.
Protection against Liabilities
We live in a litigious society, it is often said. You can easily see the potential liabilities in your yard, home, and vehicle. You are always exposed to liability and could result in costly lawsuits for damages or medical expenses if someone is injured on your property. You can have liability insurance via home insurance policies, umbrella policies, and auto insurance policies. This means that you won’t be liable for any damages if an uninsurable event occurs. They will be covered by your insurance policy.
A well-structured portfolio of insurance can be one of the most powerful safeguards for your savings plan. We can help you make sure your savings and insurance are covered. We will help you fill any gaps in your insurance.