Insurance to protect and build your wealth
Carefully chosen insurance coverage can not only help protect your wealth, but can also help you build wealth further.
For investors, mortgage protection insurance costs are important tools that can help protect and build what has been done. For many investors, the challenge is finding out what types of insurance can be purchased among the various insurance products available.
Some investors do not believe that they need additional insurance until they understand the benefits of insurance such as efficient tax planning and easy asset transfer.
There are 3 main areas of insurance that must be considered to protect and build your wealth: life, living benefits, and separate fund products.
Life insurance
There are 2 main types of life insurance: term and permanent.
Term insurance, as the name suggests, is temporary. It often ranges from 10 to 30 years, with options for renewal or conversion when the time period expires. A business owner might buy insurance for a period of 20 years if he plans to retire in 2 decades.
Permanent insurance, as the name suggests, is for life and, in addition to providing death benefits, is often used for tax planning or for clearing residual liabilities at death. As long as you pay your premium, the death benefit applies until you die.
Living allowance
Life benefits include disability insurance, critical illness insurance, and long-term care insurance — which gives you benefits while you are still alive.
Disability insurance includes support when you are sick or injured that makes you unable to work.
This insurance will replace part of your lost income when you recover. Critical illness insurance covers various diseases, such as cancer, heart attack, or stroke. After the specified waiting period, you can receive coverage. This gives more flexible financial choices to help you focus on recovery.
While long-term care insurance will be very helpful if later on you physically or mentally depend on others for treatment. You can use it to pay for treatment at your home or at the treatment facility of your choice.
It is also advisable to buy life insurance with life benefit coverage beyond what you might receive from your office. The biggest risk of relying solely on insurance benefits provided by the company you work for is if you no longer work for the company, which means you can no longer enjoy these benefits.
This is very important because in the present we tend to change jobs more often than in the past. It could be that you actually moved to a company that provides less insurance coverage or decided to become an entrepreneur.
Separate fund products
Separate fund products are arguably the same as mutual funds, including growth potential with exposure to different asset classes. What distinguishes it from mutual funds is that a separate fund product provides insurance contract benefits and is only available through insurance companies.
Separate fund products usually offer a death guarantee of 75% or 100% of the deposit. This product is the right choice if you are worried about growth, protection, and flexibility. Like many insurance products, separate fund products can help you protect the assets you have collected so far.
