Your Most Valuable Asset Your Earning Power
Henry Montag, CFP, CLTC | February 26th, 2009
Whether Youre A Corporate Executive, Business Owner Or A Professional, The Chances Of You Or Your Key men Or Partners Suffering A Significant Loss Of Income Due To A Disability Are Staggeringly High.
According To The Social Security Administration A 20 Year Old Today Has A 30% Chance Of Becoming Disabled Before They Retire. The Number Of Workers In The Wokplace That Have Suffered An Accident Or Illness Has Increased 35% Over The Last 8 Years According To The Social Security Administration.
Your Earning Power Is By Far The Most Valuable Asset You Own. More Important Than The Car You Drive. Much More Valuable Than The Worth Of Your Home. Its Also Certainly More Valuable Than All Of The Content In And Out Of Your Home Such As Artwork And Furniture.
Isnt It Ironic That Youve Insured Against Losses That Are Far Less Likely To Occur And Far Less Valuable Than Anything Getting In The Way Of Your Current And Future Earning Power Compounded For Inflation.
What Happens If Something Were To Get In The Way Of Your Being Able To Continue To Earn A Living? How Would You Continue To Pay Your Monthly Expenses ? Where Would The Money Come From To Pay For Your Ongoing Obligations Be They College Expense A Mortgage Or Rent On Your Business Or Professional Space.
If You Couldnt Work Where Would The Money Come From To Continue To Contribute To Your Retirement Plan Be It A 401 Or A Sep Or Your Ira. If Something Happened To Your Partner In Business Where Would You Get The Money To Pay Him /Her Their Salary ?How Long Would You Pay It For ? Where Would You Get The Money To Pay Your Partners Family If The Disability Were To Last For A Year Or Two At What Point Would You Want To Stop Paying Them And Just Buy Them Out ?
Unfortunately These Are Questions Many People Are Faced With After An Illness Or Injury Strikes. It Is Very Important That You And Your Spouse Discuss How Much Risk Youre Willing To Take And How Much Of The Risk Your Willing To Pay A Premium To An Insurance Company So That They Can Assume A Portion Of The Risk For You..
The Good News Is That You Can Protect Against Each And Everyone Of The Contingencies Ive Just Referred To Assuming You Have The Income To Subtantiate What You Want To Insure, And Secondly That Your Health Is Good And That You Are Able To Qualify For Such Coverage From An Insurance Company.
The Last Requirement Is That You Have An Independent Professional That Can Walk You Through The Maze Of Which Features And Benefits And Definitions And Clauses Are Truly Important And Those That You Can Dispense With.
As Always Our Practice Is Available To Assist You In Dealing With All Of The Above.
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Tags: 401k, cfp, financial planning, henry montag, insurance, ira, long term care, personal finance, retirement, social security
About the Author: Henry Montag is an Independent Certified Financial Planner as well as a CLTC. He’s been in practice since 1976 with offices on Long Island, New York. He is a contributing writer for The Moneypaper, a national financial publication, been my sourced by Investors business Daily, Long Island Business News, Newsday, Wall St Journal, The Moneypaper,Investment News, Senior Lifestyles and has held insurance and securities licenses for over thirty years.
