Insurance in general is designed to protect you and your family from disasters and their financial consequences. There are many different sorts of insurance of which the basic and most important is considered to be life insurance which makes financial provision for your dependents after your own death.

Since there are certain financial commitments you have to meet throughout life you need also to provide something even in death to secure the family home, to assist the family to meet expenses for a while, to provide for dependent parents or to provide security for your spouse and possibly children.

Financial obligations may include your funeral expenses, unsettled medical bills, mortgages, business commitments and providing for the education expenses of your children.

Precisely how much insurance you will need varies depending on lifestyle, financial needs and sources of income, debts, and the number of dependents you are supporting. In the main you will need insurance coverage which is five to ten times your present annual income.

An important part of your financial planning, whole life insurance provides you with peace of mind for any of the uncertainties of life.

1. Adequately planned life insurance will provide money in the event of premature death to deal with outstanding bills, mortgages and living expenses. It offers protection to the family you leave behind and acts as a cash resource.

2. It gives security for your hard earned estate on death by providing a tax free cash sum that can be utilized to pay estate and other death duties.

3. Life insurance plans can also have a pension or savings component which provides for you during retirement.

4. In some cases policies have riders such as restricted coverage of term insurance or critical illness for a child or spouse. There are particular rules considering eligibility for riders that you will need to determine clearly.

5. In the case of bankruptcy the cash value, together with the death benefits, of an insurance policy is exempt from your creditors.

6. Having a valid insurance policy is considered as having a financial asset and this improves your credit rating when you want health insurance or a home loan or business loan.

7. Term life insurance has double benefits as it provides protection for your spouse and children and you can get your money back at important points in your life.

8. Life insurance can be arranged in such a manner that it will cover even the expenses of your funeral.

9. Insurance can be used to protect your business from financial loss or any liabilities in case a business partner dies.

10. It can go a long way towards keeping a family’s standard of living if one partner dies unexpectedly.

Insurance forms a vital part of good financial planning but you do have to evaluate your personal risk and your longer term commitments.