Quick question, what is your biggest asset? I would be willing to bet that for a lot of people reading this article the answer to that question is either their home or their 401k. How many people said their ability to earn an income was their biggest asset? If my experience as a financial advisor the last 17 years has taught me anything, it’s that most people vastly undervalue themselves. They underestimate what they do for their family, themselves and society in general.
We all have a Human Economic Value, an ability to generate income based off of our training, education, experience and health to use these skill sets. Human Capital is a tremendous resource that we hope continues to grow and last for many years. It is an asset; it might be your biggest asset!
Is your car fully insured? What about your home, is it fully insured? Chances are you answered “yes” to both. Can you tell me how much disability insurance you have? How long would you have to be disabled before you would receive a benefit? How long would you receive benefits while you were disabled? Would the benefits be taxable or income tax free to you? What is the definition of disability? Most people cannot answer those questions without doing some research. A great number of people would have never thought to ask these questions. The reality is many times these answers are found out when it is too late, and you’re in a position of need.
A 35 year old individual earning $100,000 working to age 65 with a 3% annual increase in wages will have $4,900,268 of income in their lifetime, an asset bigger than most give it credit for. This income funds your 401k, makes your mortgage payment, puts food on the table…etc. You have protected your home and your car, make sure you protect your cash flow!
The first step is to understand how your disability insurance works. It’s time to have a conversation with someone that can educate you on various options when it comes to Long Term Disability Insurance. More importantly someone that can help you ask the right questions about your coverage or lack of coverage. This is not a process that has to take a long time and once it’s complete, you will have the peace of mind know that you are well protected.
Information provided by:
Brian Heying, CLU
1st Vice-President
Wealth Management & LPL Financial Advisor
LSB Financial, Lincoln Savings Bank
13523 University Avenue, Clive
(515) 327-9941
brian.heying@lpl.com
*Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.
