Disability Insurance & Long-Term Wealth
Imagine you had a machine in your basement with a big green button on the front. Once a month, you would get up out of bed, wander downstairs, and press the button. The machine hums to life and DING! -it produces $8,000 in brand new bills right in your hand.
Now imagine that this is the only machine of its kind. No replacement exists. If you had this magical money-making machine in your home, would you think it was prudent to invest in fire insurance? Would you insure the machine in case the unthinkable occurred?
Good news! For a mere $200 a month, you can fully insure the machine should it be damaged or quit working, and you can have it back in it’s money-making glory without interruption. Doesn’t $7,800 a month with protection sound better than $8,000 a month without?
Welcome to the world of disability insurance.
Investing In The Unexpected
Nobody loves to discuss insurance -especially disability insurance. However, if you are the sole provider for your family, your income is your biggest asset. As you make revenue and income, you are able to cover your Bare-Ass Minimums (BAM) and your other expenses and lifestyle purchases.
The Green-Button Machine is a great way to consider disability insurance. If you encounter an illness or serious situation that keeps you from being able to make income, you may find yourself suddenly missing your Green-Button Machine. Fortunately, disability insurance helps cover you should the unthinkable occur. All you have to do is pay your premium payment.
Imagine you make $100,000 a year in salary and $100,000 a year in corporate value. If you pay into disability insurance, you may pay $5,000. Similar to the Green-Button Machine, you can insure your future financial stability with a small payment. This investment far outweighs the risk!
Consider disability insurance as risk management. When you invest in disability insurance, you will add protection for your life that will far outweigh the consequences if you are suddenly unable to receive your salary.
As an added bonus, many insurance providers offer refundable plans that allow for 50-100% of what you have paid into the account. So even if you don’t use your disability insurance, you can potentially get that money back later!
Two Questions For Disability Insurance
Still not sure if disability insurance is right for you? Here are two questions to help guide you:
1. What is my plan to keep my business running smoothly if I was suddenly out of the picture?
2. If I can’t work and generate income, would my bills get paid?
By answering these questions honestly, you can better analyze whether or not disability insurance is right for you and your unique situation. If you have key employees, investments, or other assets that will provide you with income and coverage should you be taken out of commission, you may not need to invest in disability insurance.
But when it comes down to it, it’s always better to be prepared for the unknown and know you are covered than try to scramble for answers when it’s too late.
Want to hear more great lessons on life, happiness, and true wealth? Check out the Picture of Wealth podcast -hosted by Dustin Serviss. Discover the tips, tricks, and insights that unlock a life well spent. Listen today where you listen to podcasts.