April is coming to an end and with it is the financial literacy month. Over the past four weeks you have probably read dozens of articles on personal finance, but by no means does this mean the journey to financial literacy has ended. Improving your financial IQ is a life long endeavor, situations change, products change, times change, in short life happens.

I thought we wrap things up with a quick overview of how insurance fits in your personal finance plans. Often insurance is either ignored or not regarded as important in finances, ironically insurance is the most important part of personal finance. Here is a look at the most overlooked insurance products and why they are important.

Life Insurance

Many either ignore life insurance in their financial planning or think it is not important. If you have dependents, life insurance is vital to your family. It is not there to increase your net worth or benefit you directly; its purpose is to protect your family! Not having sufficient life insurance is leaving your family very vulnerable, just imagine you have a mortgage and other loans over $300,000 and something were to happen to you, what will happen to your loved ones? They have to either down size and fire sell the home or use retirement savings, not only will your family be in emotional stress but also financial stress. Protect your family by purchasing enough life insurance to help them through the rough times. Not sure how much is enough? See how much life insurance do I need?

Critical Illness Insurance

Critical illness insurance is often seen as a “luxury” and not as a real necessity. Personally I believe critical illness insurance is more important than life insurance. Unlike life insurance, critical illness insurance is known as living benefit and is there to protect you and your family. Critical illness insurance gives you a lump sum when you are diagnosed with any of the covered illnesses (heart attack, stroke, cancer …and more). It is tax-free and can be used for anything; most often it is used to seek treatment outside of the country.

Disability Insurance

Disability insurance is another vital insurance. Take a minute and think about what is the most important asset you have? It is your ability to generate income, if you are making say $40,000/year and you are 30 years old, you will be making over $1.4 Million over the next 35 years not including any raises. If you owned something that was worth $1.4 Million would you insure it? Disability insurance is often the most expensive one to purchase, however most employers offer this in group plans.

Insurance is one of the very few products that you purchase with the hope of never having to use it. You do not need expensive products, just purchase enough insurance to cover your needs, you can follow these 14 tips when purchasing insurance.