Carefully selected insurance coverage not only will help protect your wealth, insurance can also help you build it further.

Insurance is an important tool that can help investors protect and build what they have done. For many investors, the challenge is to find out what types of insurance can be purchased among the various products available in the category of life, living allowances and separate funding contracts.

Some investors, including rich people, do not believe they need additional insurance until they understand the benefits of insurance such as efficient tax planning and ease of asset transfer.

There are 3 main areas of insurance that should be considered to protect and build your wealth: Life insurance, living benefits and segregated fund products. Here is a brief outline of the benefits of each type.

Life insurance

There are 2 main types of life insurance: futures and permanent.

Term insurance, as the name implies, is temporary. It often ranges from 10 to 30 years, with the option of renewal or conversion when the time period expires. Arruda says that a business owner might buy a 20-year insurance plan if he plans to retire in 2 decades, or the homeowner might choose a ten-year term if he has another 10 years for mortgages and wants to protect his family's home if he must die before that.

Permanent insurance, as the name implies, for lifetime and, in addition to providing death benefits, is often used for tax planning or for clearing the remaining obligations at death, Arruda said. "As long as you pay your premium, that death benefit is in force until you die," he said.

Living benefits

Living benefits include disability insurance, critical illness insurance, and long-term care insurance-which gives you an advantage while you are alive.

Disability insurance includes support when you are sick or injured so you cannot work. This insurance will replace a portion of your lost revenue when you recover. Critical illness insurance covers a variety of diseases, depending on their policies, such as cancer, heart attack or stroke. After the specified waiting period, you may receive a rounded payment. This gives you more flexible financial options to help you focus on recovery. While long term care insurance will be very helpful if in the future you are physically or mentally dependent on others for treatment. You can use it to pay for treatment at your home or at the care facility of your choice.

Do not wait until you retire to consider how you will fund an increase in health care costs. It is important to consider the health care needs in your long-term plan so that all options are available if one day you have chronic health conditions.

It is also recommended to buy life insurance with life benefit coverage beyond what you might receive from your office, to reduce the risk of running out of costs. The biggest risk of relying solely on the profits provided by your company is that if you no longer work for the company, the profits will also be lost.

This is very important because in the present we tend to change jobs more often than in the past, maybe you just moved to a company that provides less coverage of insurance coverage or decides to become an entrepreneur.

Segregated fund products

Segregated fund products are similar to mutual funds, including the potential for growth with exposure to different asset classes. What distinguishes it from mutual funds is that separate funding products provide insurance contract benefits and are only available through insurance companies.

Depending on the product, a Segregated fund product usually offers a death guarantee of 75 or 100% of the deposit. This product is the right choice if you are concerned with growth, protection and flexibility. Like many insurance products, segregated fund products can help you protect the assets you have collected so far.