Insurance’s primary purpose is to help protect you against certain risks. Money can’t buy everything obviously, but it can help a great deal. Today, I sat down and tried to figure out the main risks that I face. In general, risks are defined in terms of assets that you have. Let’s start off by listing the most important things in my life:
And material stuff:
I guess if I were to look for further things I’d go for:
In terms of my family, the main financial risks are that something would happen to me or my wife that would prevent us from working or even lead to death. So the main events that I want to protect are:
–My and/or my wife’s death – life insurance to buy the house, provide for the kids, etc
–My or my wife becoming unable to work and/or requiring intensive health care (critical illness insurance), disability insurance)
–Getting financial aid if we require any type of medical care (health insurance)
Others might see the risk of running out of funds for retirement (annuity), having their identity stolen (id theft insurance), their phone, etc. I do think that finding the main risks that you want to be protected from is a critical part. Next week, I will attempt to prioritize those and then compare with the insurance coverage that I currently have to see if it is sufficient.