You maybe surprised to hear that in most cases your largest asset is not your house or business – but your ability to earn an income. You insure your house, business, car, jewelry – what about your income!!
The younger you are – the greater your financial risk! Consider a 30 year old earning $50,000 / year – their remaining income potential is $1.75 Million. (not taking into account inflation and merit or promotion increases) $3.5 Million if earning $100,000 per year.
Disability Income Replacement:
Why would you not protect that in the event of an accident, injury or illness. Especially if you have children, parents or a spouse depending on you financially. Government benefits are very limited. UI is only for 15 weeks and CPP benefits are Maximum $~1,000 / mth. Worker compensation is only for a work place accident!! That is only partial coverage. You need 24 hour protection as accidents don't just happen at work!
Even if you have coverage through your employer a review of the coverage can reveal that you don’t have enough, or can identify potential benefit limitations.
While no one plans to become disabled, you can be prepared with an income replacement plan. There is no right or wrong decision – other than to do nothing!!!
Do I need it?
Ask yourself the following questions. If your answer is no to all three, then you need some form of Income Protection:
- Will your employer continue to pay you a percentage of your salary indefinitely if you are off sick?
- If not, and you are part of a couple, could you pay all the bills and live on your partner’s income indefinitely?
- If not (or you are single) do you have savings you could live off indefinitely?
If you found this information helpful or have any questions – send me a note.
I am a Certified Financial Planner in the Burlington to Mississauga area.
I am a full Service Financial Planner, Life Disability & Critical Illness needs Analysis and Insurance. RRSP, RESP, TFSA, High Interest Savings accounts, Tax sheltered / tax deferred investments and Estate Planning.
