Simply put, insurance is about protecting assets and creating financial plans.
The largest asset we all have, and the cornerstone of any financial plan, is the ability to work.
Homeowner’s insurance will help rebuild your home after a covered loss, but your home is not your largest asset. Your ability to work and pay the mortgage is your largest asset in most cases.
As an example, say that a 40 year old individual buys a half million dollar house and makes $100,000 a year. Working to age 65 their potential earnings would be over $2,500,000, assuming a pay raise or two. The value of future earnings is tremendous.
If someone suggested not purchasing homeowner’s insurance, others would look at them as though they are not all there. Yet many individuals will leave their current and future income at risk due to thousands of different illnesses and injuries that could leave them unable to work.
Often, the reason people do not purchase a disability policy is because it was never offered to them. The topic of disability insurance is an important one, and many individuals should be made aware of the risk they are taking by going without.
Business owners purchase liability insurance and other types of insurance to protect their business. But many forget to insure their most important asset which is their personal income. Take a dentist with several employees as an example. If an injury or illness occurs how will their personal income be affected? How will they pay the building lease? How will the dentist continue to pay the employees? The answer is Business Overhead Expense disability insurance (BOE.)
If the revenue or income of a business will decrease if the owner is disabled, then there is a need for BOE.