Have you ever been asked that question? How did you answer it? Most people look for something concrete. They need something they can see, touch and feel. They might have a big investment account or a business they own but for most people they say their house. The more money people have the bigger the house. The bigger the house the bigger the asset. So it makes sense to think that.
How are you able to have such a great house?
This is where they start thinking. Maybe an investment paid off and that comes up or they bring up that business again. Most people just have a good job that they like. Oh a job or business, what does that depend on? I always get blank stares if I ask this question.
What does your job or your business depend on?
They depend on you. Without you and your ability to work hard they wouldn’t exist. I mean isn’t this true? With the abilities, education and experience that you have you were able to earn an income. Usually, the better the skills the better the income. So what to all your assets mentioned so far if you were unable to earn this income?
Do you have disability insurance?
Disability insurance protects your greatest asset, your ability to earn an income. If you are unable to work due to illness or injury a good disability insurance policy will step in and replace a large portion of your income. If you run a business this policy could keep the business running either by covering the expense or by freeing up money to compensate for the lack of an executive.
I’m covered through work.
I hear this all the time and you probably do have some coverage through work. A lot of employers are nice enough to even pay for this coverage. The problem is that people don’t understand the coverage they have through work. They skim the over their options and see 60% coverage and say great. What they don’t realize is they usually have closer to 40% coverage through work. The problem is that most group coverages don’t cover bonuses or commissions. They also usually have tax consequences. What do you make a year? Could you live off of 40% of that? A better question might be, would you want to?