Why is it that many professionals such as attorneys and physicians immediately understand the need for disability insurance, yet other professionals such as salespeople, electricians, executives, and business owners often do not see the need at first? Many times when they do think about buying disability insurance they wait until it is too late.
Questions To Ponder:
Who depends on your income? Almost always the answer is a spouse, children, yourself, or other family members.
What is your most valuable asset? The most common answer to this question is a home. We can all agree that a house is a valuable asset. As an example, when purchasing a home the bank will require homeowner’s insurance because they want a guarantee that the mortgage will be paid if the house is destroyed. The bank considers the house a valuable asset.
Our home is valuable, but the ability to earn an income is our most valuable asset. A 35 year old making $100,000 a year will generate a minimum of $3,000,000 in income during their working years, a very valuable asset! Our ability to work is like a money printing machine, a machine that is very valuable and must be insured. Just because someone is disabled and can’t work does not mean the financial obligations fall to the wayside, we still need to print money to live.
The question is how do we pay for life’s non-cancellable obligations such as rent, utilities, groceries, health insurance, and the mortgage if we suffered a disability? If we became disabled how long would our savings last? How long before our retirement dollars disappear? How long before your credit score is destroyed? The answer to all of the above questions is simple: Disability Insurance.
For the small business owner there are specialty disability products such as Business Overhead Expense (BOE) policies. The BOE policy will pay for many of the owner’s expenses while disabled such as rent, utilities, equipment leases, office supplies, and more. Another specialty product is Disability Buy Out (DBO.) If one owner is disabled and cannot return to work the DBO policy will provide the funds required to buy out the disabled owner’s interest in the business.
Your most valuable asset is the ability to make a living. Income protection is asset protection, and disability insurance plays a vital role in our financial security.