The definition of an asset is “a useful or valuable quality, person or thing.” Many people, when asked what they consider their most important asset, cite their homes or their savings. However, while these are certainly high priorities, the fact is that everyone’s key asset is the ability to earn an income. Without it, you likely wouldn’t have a home or savings.
It is essential to protect that asset with disability insurance. Disability insurance is designed to replace some or all of your income if you become disabled and unable to work due to illness or injury, as covered by the policy. A disability insurance policy usually provides benefits in monthly increments, so you are able to pay your regular living expenses and maintain your standard of living.
There are many variables involved in a disability insurance plan, but the key components consist of the following: the amount of income to be paid when a triggering event occurs, how long those payments will continue and how long you must wait for the benefits to start after the triggering event happens.
When you purchase an individual disability insurance policy, the premiums are typically paid out of pocket with after-tax dollars. Discuss with your insurance professional the tax ramifications of this; it is likely your benefits will be tax free.
Unquestionably, your ability to earn an income is of vital importance. Ensure that you protect this vital asset with disability insurance but also be careful to select the plan that will work for you. Insurance professionals can help.