For instance, a 35 year old currently earning around $50,000 a year would easily lose over $2 million in potential earnings if the ability to work suddenly ended. Of course, this figure doesn’t account for regular pay increases or promotions that could easily increase this figure exponentially. For most people, income is the most valuable asset they have.Every day, workers become disabled or ill and lose their ability earn a living. Major illnesses and accidents can occur without warning, leaving workers without the means to make any money. Of course, major incidents aren’t the only issue workers must worry about; workers can lose out on income for just a few months or a year, which can lead to significant turmoil.
Protecting a Worker’s Most Valuable Asset
It’s important to insure homes and cars, but it’s also important to insure income too. An income protection policy can replace as much as 75% of a worker’s income if disaster or illness strikes. There is usually a waiting period of approximately 30 days before becoming eligible to draw, but it also depends on the type of policy.Income protection insurance provides the necessary funds for workers to continue paying for mortgage, rent, groceries, and more. Without insurance or another form of income, staying afloat can be almost impossible.
What About Disability Pensions & Sick Leave?
Sick leave is designed to cover short term absences. Most workers only have a few weeks of sick leave available. In extreme cases, it’s unlikely that a worker would have accrued enough sick leave to cover the rest of their working lives.Some workers believe that disability pensions will meet their needs, but most pensions won’t cover the needs and expenses of most workers. If a worker has a mortgage to pay and a family to support, the income won’t go very far. Additionally, workers compensation comprises a safety net for people who are injured at work, but it doesn’t cover illnesses or injuries that occur off the job.
