Double family security: how insurance can be as important as an emergency fund – 03/29/2024 – From Grão to Grão

When beginning the investment journey, many parents are faced with a dilemma: focus on building an emergency fund or invest in life, personal accident and disability insurance due to accident or illness? This question is common, but the answer does not need to be exclusive. In fact, both are equally important for the family’s financial security.

The emergency reserve acts as a financial cushion, protecting the family against unforeseen events and allowing expenses to be covered without the need for debt. However, there are situations that go beyond everyday expenses or temporary emergencies, such as the loss of a provider or the inability to generate income due to an accident. This is where life and personal accident insurance becomes vital.

Imagine, for example, a young family man who, unexpectedly, suffers an accident and is unable to work. Without disability insurance, the financial impact on the family can be devastating, quickly using up the emergency fund and compromising everyone’s financial future. With adequate insurance, however, the family will not only be able to maintain their standard of living, but will also have support for future expenses, such as their children’s education.

Furthermore, the age of the insured is a crucial factor in the cost of insurance. The younger you are when you purchase your insurance, the lower your lifetime cost will be. This is due to the lower risk associated with younger people, which translates into lower premiums. Therefore, starting early is not only prudent but also cost-effective.

Many people focus on car insurance and forget what is most important. Most of the time, these young couples do not know that disability insurance due to accident or illness with insured capital more than five times the amount of car insurance can be much cheaper than insuring the car itself.

Including insurance in financial planning increases family security comprehensively. By considering insurance as an essential part of this planning, protection is guaranteed against events that could otherwise completely destabilize the family’s financial security.

Speaking directly to you, who may be pondering these options now, consider the following: the value of being covered goes beyond the numbers. Knowing that you and your family are protected can bring invaluable peace of mind. This is reflected not only in the family’s financial health, but also in the emotional well-being and relationship of the couple, who will know that they are prepared to face the challenges that may arise together. I’ve seen many readers here comment that owning a property brings security and peace to the family. Life, disability and personal accident insurance would have a similar result.

Finally, something that should not be forgotten is the flexibility that many insurance policies offer. Many policies allow for adjustments and updates as your family’s living situation and needs change. This means insurance can be tailored to offer the most appropriate protection at every stage of life, ensuring you always have the level of cover you need.

Therefore, when planning your family’s financial future, remember that emergency savings and life, personal accident and disability insurance go hand in hand. Together, they form a solid foundation that allows you and your family to face the future with confidence, knowing you are protected against life’s unexpected events. After all, you may not be able or unwilling to rely solely on INSS.

Michael Viriato is an investment advisor and founding partner of Investor’s House.

Speak directly to me via email.

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