Any good financial plan is guided by a snapshot of your current personal finances, goals you want to achieve, and the strategies you’ve set in place to make it happen. 

It should also take into consideration rudimentary factors like your cash flow, savings, debt, investments and any other elements that affect your financial well-being.

But what’s often not considered enough in financial planning are the roles that life insurance and financial wellness play. They’re commonly treated as afterthoughts because let’s face it – who wants to think about their death, especially when they could be daydreaming about their forever home? 

While it can be a mood buster, it does pay to be prepared and your future self will thank you for it. Life insurance has many advantages such as income replacement for beneficiaries, funding a small business, and a source of forced savings and investment.‍

The role of insurance when planning and managing your personal finances

You never know when you’ll face a financial downturn, which is why being prepared is essential. 

An insurance policy will keep you from emptying your pockets and draining your emergency fund more than you’re comfortable parting with. It can protect your family and loved ones if you get into an accident, become sick, disabled, or pass away.

If you don’t have insurance coverage, many of these situations can be expensive and take a toll on your dependents. Life insurance relieves part of that burden and gives you peace of mind to keep things status quo.‍

What insurance is necessary for my personal finances?

Today there’s insurance for just about everything. Whether you need it all is the question. 

This depends on your unique lifestyle and day-to-day routine. From the kind of car you drive and the physical activities you enjoy doing to your family composition, financial situation, and food you put in front of your plate — there’s a lot to be said about how insurance can improve your holistic wellbeing.

Give this checklist a read to determine when life insurance might make sense for you and when it doesn’t.

Unfortunately, many people don’t see the value or urgency of life insurance, especially when they’re young, and put it off until it’s much too late to recover from the aftermath once the damage is done.‍

If we know insurance is inherently good for us, then why do we avoid buying it?

It’s human nature to avoid the things we fear, even if we see them coming from a mile away. Ignorance is bliss, and up until recently, there hasn’t been enough education floating around the insurance space to educate young people.

Historically, insurance products can be confusing to understand and not all policies include complete coverage for every life event or inconvenience that pops up.

The entrance of insurtechs helps make sensitive decision-making easier and more accessible so that what once was never top of mind can reorient itself as a priority.‍

Walnut: the new wave insurance that fits you first

Just as you would put money away in a high-interest savings account to grow your hard-earned money, the same level of consideration should be applied towards life insurance when developing your personal finance plan.

A good financial plan creates a roadmap for your money and helps you achieve your financial goals. Walnut helps you get there.

One-size-fits-all life insurance doesn’t have a place at Walnut. Instead, our subscription plans are tailored to your exact needs and everyday interests, so you can enjoy life even during uncertain times. If you're thinking about how term life insurance can benefit you in your future and want to make sure the price is right for you, Money Crashers suggests a ladder strategy as a way to keep life insurance financially feasible too, since premiums rise as you age. Life insurance ladders feature multiple policies, each with their own term and death benefits, so the cumulative cost can sometimes be less than that of a single premium.

Start enjoying optional wellness benefits that boost your quality of life while still sticking within your budget.