Insurance is an important part of a financial plan. Insurance is not intended to make an individual better off than before the event. The purpose of insurance is to cover risks or financial losses.
Insurance may be acquired from multiple sources ( self employment, employer or government)
Even with insurance , an individual should still have funds to pay the deductible and co-insurance.
Purposes and types of Insurance
1- You are having a baby and need medical care. You need health insurance
2- After back surgery, you are unable to work for six months. So you need disability insurance
3-You are elderly and need assistance to continue living at home. You need long term care insurance
4- Your home is destroyed by flood / fire and you need to rebuild. You need property insurance or homeowners insurance.
5- The car you are driving causes an accident that injures someone else. You are covered if you have lability insurance/ Automobile insurance.
6- A sudden death of a family member results in a loss of income. So you need to have life insurance