Insurance: Protecting the Plan

All the saving in the world can be wiped out by one disaster — so smart families insure against big risks. Insurance means you pay a small, regular amount (a premium) and the insurer covers a large, rare cost. The two most important for most families: health insurance (a serious illness can otherwise drain savings — a top cause of financial ruin) and term life insurance (if someone's income supports others, term life replaces that income cheaply if they die). Key idea: insure the catastrophes you can't afford, not the small stuff you can. And "term" life is pure, low-cost protection — don't confuse it with investment-linked policies that mix the two and often cost more.