how can insurance be an essential requirement for planning

You are protecting yourself from sudden and unexpected losses

Insurance is designed to protect us from the what if. Most people cannot afford the financial hit of something devastating, & insurance provides that cushion. Say a flood wipes out ur home- u now have no where to live, & a mortgage to pay. Insurance helps restore the home, or at least pay off the mortgage so ur credit is not destroyed.

We have auto insurance to fix our cars in case of accident, homeowners insurance to protect against fire, life insurance to provide income to our families if we die, & health insurance in case we become ill.

Without insurance, most people would not be able to survive the struggles of life, since we r all faced with something catastrophic at one point or another.

If you saved 10% of your income for 10 years and then became disabled for one year you'd have no savings.

Any more questions?

The only thing certain in life is that you will die. There is a 100% guarantee that this event will occur. Buying insurance to protect those you left behind is a very essential requirement for planning for the future of those you love. You would not want to leave your spouse/children with your debt.

Insurance is a very important part of financial planning (assuming u mean financial planning & not something else). Insurance is there to manage risk.if something bad happens it will bail u out without paying the entire amount yourself.

Let is use retirement as an example:

Long Term Care insurance: You r most likely to use it when u r retired. The costs of long term care will severely irrode ur retirement savings VERY quickly since there is a huge cost to staying in a Long Term Care facility or hiring a nurse to come to the house to take care of you. Also, if something happens prior to retirement & u need long term care for a period of time, u wo not be able to continue to save for ur retirement as u will likely have no income & increased expenses. Depending on ur age this could be a huge one.once the babyboomers start filling hospital & long term care beds, what do u think is going to happen to the costs of health care.increased demand (more people needing beds) + lower supply (no more facilites being built because it is a temporary need.once the babyboomers r dead, there r not nearly as many people needing the services) = prices & costs increase (AKA: they will charge more for the services)

Critical Illness Insurance: If u get diagnosed with a critical illness like cancer, heart attack or stroke (the average age of diagnosis is 48 for critical illnesses), u may need to come up with a substantial amount of money ($50,000 to go to the Mayo Clinic in the US, which is a leading clinic) so u can focus on recovering & not be forced to work through Chemo treatments etc. If u do not have an insurance policy to pay out that money, where will that money come from?

You wo not get a loan (You: ''Hi Mr. Banker, l need a loan for $50,000 so l can get treatments for a serious illness. l might die in 2 months & not be able to pay it back, but can we do it anyway?'' Banker: ''BAHAHAHAHAHAHA - Not a chance!). Even if u do get the loan, u will get a monthly reminder for the next 5 years everytime that huge payment (which could be going to ur retirement savings instead) comes out saying ''Hey, remember when u almost died & how much it is costing u to get better?''

The only other option is to withdraw from ur savings. #1 - u may trigger a taxable distribution meaning u will have to pay taxes over & above that $50,000 u withdraw #2 - u may have to pay some sort of 'penalty' or fee to withdraw u savings (IE: DSC fees on mutual funds, brokerage fees on stocks, interest penalties on GIC's, etc) #3 - by withdrawing that money u r losing out on a serious amount of compunded interest. This can add up to a HUGE amount by the time u retire.

Most good Critical Illness plans have a return of premium option on it where u get all ur money back if u cancel it after a certain period of time. It is a money back guarantee, why would not u cover ur butt if it does not cost u anything in the end?

Here is a calculator to figure out the cost of a critical illness if u withdraw from an RRSP (Iif you're in Canada. IF you're not it should work out to being close since it is factoring lost compounded interest, etc): https://tolivewell.ca/LiveWell/public/e/RRSPWithdrawal/ImpactOfWithdrawal.aspx

Finally Life Insurance: Whole Life insruance comes in handy more for tax planning purposes. You can contribute to a life insurances policy fund & it grows tax sheltered & u can withdraw it tax free if u do it right. It is one of only a couple legal tax shelters that r endorsed by Canada Customs & Revenue Agency (it is written right in the income tax act). RRSP is r tax sheltered, but u still pay tax when u withdraw them. Further, if something happens & u die, all those RRSP is will be taxed when they get passed on.a Life insurance policy can cover the taxes & preserve u estate from the tax man so ur family can enjoy all the money instead of giving most of it to the governement Unless of course u like the governement more than ur family.haha Term life insruance is useless in retirement planning.it has no tax advantages & will expire at age 80.it is good for short term uses (protecting ur family from ur debts, or making sure the kids get through school), but not retirement planning.

Any other insurances u were wondering about?