Yes, Etoile, it is essential, not necessarily for you, as if you should sadly become mentally incapable of running your own affairs, you might not realise what a state things can get into. However, for your family, it makes a huge difference by making it a lot easier (and cheaper) to stand in for you and make decisions which you can no longer make.
My mother couldn't deal with her financial affairs for some time before she died, and chose to invoke the financial component of her POA so that my brother and I could do that for her, and then the welfare component was needed when she could no longer decide anything for herself.
Please do it for your family!