Personal Finance Essentials
Protecting Your Earning Power
Your Paycheck Is Your Most Valuable Asset
What Happens If It Stops?
Your largest financial asset is not your house, your health or your company pension. For almost everyone who is still working, your largest asset is your ability to produce an income. How long could you continue to pay your bills if you suddenly stopped receiving a paycheck? According to the Council for Disability Awareness, nearly six in ten American workers say they’d be unable to make ends meet within one month.
Why Disability Insurance Is Essential
Despite the risk, 70 percent of American workers in the private sector either don’t have long-term disability coverage or believe what they have is inadequate. The assumption is usually something like: ‘It won’t happen to me.’ But statistics tell a different story. Before today’s 25-year-olds reach age 65, one in three will suffer a disability lasting 30 days or longer. One in four will die before reaching retirement.
Modern medicine can keep us alive through things that would have been fatal a generation ago. But that doesn’t mean we’ll be able to keep working. A study of more than 2,000 severely ill patients from five medical centers found that nearly a third of families lost most of their life savings as a result of the patient’s illness. In addition to direct medical costs, 29 percent of families studied lost a major source of income because either the patient couldn’t work or another family member had to quit a job to provide care.