What is your biggest asset? Is it your house, your car, your boat? No, it is your ability to earn income. We buy home insurance and auto insurance, but often we forget to insure ourselves against the risk of being unable to work.
As a cancer survivor, I know all about the financial costs associated with being off of work. Seven years ago, I was diagnosed with cancer, and the treatments took approximately one year to complete.
I was off work during that time, and luckily had disability insurance in place through my workplace. This ensured that I maintained a monthly income while off sick, to pay my expenses. What I didn’t realize was that there would be all kinds of additional expenses associated with my illness.
There were the numerous taxi rides, I chose to pursue homeopathic treatment, the medication costs above what my insurance covered, household help, meal and grocery delivery, to name a few. Meeting these expenses was a huge challenge, and had I known better, I would have planned better.
So, where did I go wrong?
1) When selecting my disability benefits, I chose coverage of only 50% of my income, and I could have chosen up to 70%, for a few dollars more per month. I viewed myself as invincible, as most do!!
2) I did not purchase Critical Illness Insurance, which would have helped to cover the extra expenses associated with my illness.
Consider these facts:
1) Nearly 50% of all individuals 35 or younger will be disabled for 90 days or longer prior to age 65.
2) Approximately 30% of all people age 35 – 65 will suffer a disability for at least 90 days, and about 1 in 7 can expect to become disabled for 5 years or more.
3) Statistics say that 83% of business owners do not have disability insurance in place!
Because I didn’t have the best plan in place, I had to dip into my retirement savings during my time off to make ends meet. Certainly not an ideal situation. So, I decided to go into business for myself to educate people about the risks that we all face, and how we can best manage those risks.
Is your biggest asset protected?
Brenda Hiscock CFP
Guilfoyle Financial Planning Inc.