When it comes to sports, everyone loves talking about the team with the high-flying offense that can score goals or touchdowns at will. They’re flashy. They’re exciting to watch. They get the crowd going.

But the teams that are built to last and end up actually winning championships? They have a rock-solid defense, too. They can shut other teams down and keep them off the scoreboard. Ultimately, it doesn’t matter if you score a bunch of points if you give up more in the end.

The same applies to your investments. Your offense is your ability to build wealth by investing consistently over time in mutual funds that help your money grow. We’ve already talked through your gameplan for that. But you also need to take steps to protect the wealth you’re building. It’s time to talk about defense! 

If you’re married, have children, or have people in your life who depend on you for support, then you need life insurance in place. When you have the right life insurance, your loved ones won’t have to worry about how to make ends meet if you die.

We recommend buying a term life insurance policy worth 10–12 times your annual income. With a term life policy, the insurance company guarantees a death benefit if you (the insured) die during a specific period of time (that’s the “term”)—which could be 10, 15, 20, or even 30 years (though a 15–20-year term is all most people need).

It’s also the most affordable, cost-effective way to get life insurance. That way, you can focus on building enough wealth so that you become self-insured, which means you have enough money in savings and investments that your family will be fine if you pass away, and you won’t need to pay for life insurance anymore.

And as you start to build wealth, the basic liability insurance coverage that comes with your homeowners and auto policies might not be enough. You could end up vulnerable to folks looking to score a quick buck through some frivolous lawsuit or another large claim. That’s where umbrella insurance comes in.

An umbrella policy provides extra coverage for lawsuits and large claims that aren’t fully covered by your homeowners or auto insurance policies. It’s basically an extra layer of personal liability coverage if someone sues you over an injury, property damage, or some other situation. This protects you (plus your family and other household members) from financial fallout due to large claims or lawsuits that exceed the limits of your other insurance policies.

If you have a net worth higher than $500,000, you need to start thinking about getting an umbrella policy.

An estate plan is where you decide what happens to everything you own (including the wealth you’ve grown) after you pass away. It involves creating binding legal documents to make sure your wishes are carried out.

Is this stuff fun to think about? Of course not. No one likes thinking about their own mortality. But here’s the thing: Nobody makes it out of this life alive! So make sure you’re really clear about who gets what when you kick the bucket (where did that phrase come from, anyway?).  

The first thing you need to do is make a will. Everybody needs a will. And when we say everybody, we mean everybody. If you die without a plan in place, you’re putting your loved ones in a very difficult spot. They’ll be forced to make some really hard, emotional decisions while they’re grieving because you didn’t leave them with clear instructions. Don’t be that person.