Final answer:
Insurance indeed can protect and potentially enhance a person's net worth by providing a safety net against financial losses, and the cash value from certain life insurance policies can be accessed as an account for the policyholder's use.
Step-by-step explanation:
True, insurance can protect your existing net worth and also increase the likelihood that you will be able to increase your net worth in the future. By safeguarding against financial loss through risk-management strategies such as insurance policies, individuals can ensure that their savings and investments are not adversely affected by unforeseen events. For instance, cash-value life insurance not only provides a death benefit but also accumulates a cash value that can be used as a financial resource.
Developing a sound financial plan is essential for effectively managing income and expenditures, and insurance plays a critical role in this process by mitigating risks that could derail financial goals. Furthermore, starting to save early and investing wisely helps in growing a financial nest egg, which is reinforced by the protective cushion that insurance offers.