Insurance is the base of every sound financial plan. Without adequate insurance, in the event of a catastrophic occurrence, you could lose many financial assets that have taken a lifetime to accumulate.

The following five areas are considered essential to protect and have adequate insurance coverage:

• Home (including Renter's, Flood, and Earthquake)
• Auto
• Health (including Dental)
• Disability
• Life

In addition, consider an umbrella liability insurance policy. Umbrella liability insurance provides an extra layer of liability insurance to protect the appreciable assets you have. It is generally added onto a car or homeowner's insurance policy to provide an 'umbrella. over what those policies cover. With this kind of insurance, an individual's liability limit can be increased to $1 million or more for just several hundred dollars annually. Do not neglect or buy too little liability insurance. Many people incorrectly insure based on their net worth. Buy only the minimum if you have just a few assets. If you or your family engages in activities that increase the likelihood of liability losses, higher liability limits should be considered.