How Much Insurance Should You Purchase to Protect Your Wealth?

There are many ways to build wealth from pursuing an in demand degree that will command a high salary when you graduate to investing early and steadily to not spending money frivolously.  However, another way to grow your wealth is to preserve it.

Insurance Protects Your Wealth

Insurance is an excellent way to maintain your wealth.  If you own an apartment complex and there’s a fire, your insurance policy can protect your finances because you don’t have to pay out of pocket for the damages.

Most people would agree that home insurance, life insurance, health insurance, and car insurance are all necessities when it comes to protecting yourself and your finances.  The gray area comes when you consider other types of insurance.

Should You Purchase Other Types of Insurance?

If you’re spending $30,000 on your upcoming wedding, should you take out an insurance policy to protect yourself and recoup these costs if something disrupts the wedding?  (Think of the unfortunate people each year who can’t have their weddings when they were scheduled because of hurricane activity, for example.)

If you’re planning a trip around the world that will cost $25,000, should you get travel insurance from the HBF website or another source, or should you just take the chance that everything will go as planned?

Ultimately, the decision rests in the cost of the insurance and the amount of money you can afford to lose.  If you’re wedding is cancelled due to an unforeseen event, could you handle losing a large portion of the money?  Would you have the cash to rebook the hall and pay again?  If not, then you’ll likely want insurance, especially if the insurance is fairly low cost.

Travelling is fraught with even more unexpected events.  How much have you paid for in advance?  Will you be able to get your money back if you’re unable to complete your travel itinerary?  What if you get sick?  If you’re simply booking a flight across country, you likely don’t need travel insurance, but if you have more elaborate travel plans, you’ll definitely want to consider it.

Growing your wealth isn’t just about how much money you can make and grow.  It’s also about preserving and protecting the wealth that you already have.  One of the best ways to do that is to protect yourself with insurance–not just the basic insurance like home, life, health, and auto, but also other types like travel insurance.

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photo by: CarbonNYC

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