Recognizing that human capital is important means that we also want to protect it to the extent we can. Although it is not easy to protect the overall level of our earnings powers, we can financially protect against death, which is the worst-case scenario. Most of us will want to invest in life insurance, which protects us against this mortality risk. Thus, our financial portfolio during the accumulation stage of our lives will typically consist of stocks, bonds, and life insurance. We face another kind of risk after we retire. During the retirement stage of our lives, we are usually consuming more than our income (., some.
