Billy Hope, MBA
Wealth Advisor
Redwood Financial Network
Solon, Ohio

Insurance is a common hot button for people.  We know we should have it, we’re just not sure why?  The life insurance conversation, while being a tough one, is a conversation that we conceptually understand.  If I am not here anymore, my family needs “insert need/amount here”.  The car insurance conversation is a simple one, mostly because it is required.  Insurance exists to offer you protection.

So how do you protect your biggest asset?  First you must realize what your biggest asset is.  Most people immediately think their home or their car.  Most people would be incorrect.  Your biggest asset is your ability to earn money.  Your lifestyle is predicated on your ability to make money.  What if an accident or a health-related issue arose, and you couldn’t work anymore, how would you survive?  Borrow money from people, use credit cards, tap into retirement accounts?  In a perfect world, our income would continue to come in.  Cue disability insurance.

Disability insurance can replace a portion of your income if you couldn’t work for a period of time due to illness or injury.  Back to the conceptual discussion.  With life Insurance, if you die while it’s in place your beneficiary receives a death benefit, pretty straight forward.  With disability insurance it is not that simple.  There are many parts to disability insurance; When does it kick in, how long will the benefit last, what qualifies as a disability, etc. 

Strictly from a financial aspect, you could argue that a disability is worse than death.  If you die, your expenses go with you.  However, if you couldn’t work anymore you would still need clothes, food, health care, child care, etc.

When working on your financial plan be sure to cover all your insurance bases.  Think about how a loss of your biggest asset, your ability to earn income, would affect your overall financial situation.  If you need guidance, seek out the help of a professional that can help you get a better understanding.