If you were to ask the average Canadian what their most valuable asset is, and if they are a homeowner, they would likely say their principal residence. While that is likely true when it comes to something tangible one can buy or sell, it is far from your most valuable asset.
So what is your most valuable asset? We believe that it is your ability to earn an income.
Your ability to earn an income serves as the foundation for financial stability, enabling you to meet daily needs, pursue dreams, and build a secure future. Keep reading to learn more about why this is important, and how to safeguard this asset with insurance.
Your Ability to Generate Income
The following chart illustrates your total earning potential until age 45 based on annual income and current age. When illustrated this way, you can grasp the significance of how valuable your ability to work and earn really is.
Earning Potential by Age 45
| Annual Income | At Age 25 | At Age 35 | At Age 45 |
| $35,000 | $2,359,089 | $1,536,595 | $894,063 |
| $50,000 | $3,370,128 | $2,195,135 | $1,277,233 |
| $65,000 | $4,381,166 | $2,853,676 | $1,660,403 |
| $90,000 | $6,066,230 | $3,951,243 | $2,299,019 |
| $120,000 | $8,088,306 | $5,268,324 | $3,065,359 |
| $150,000 | $10,110,383 | $6,585,405 | $3,831,699 |
Assumes an annual increase of 2.5%
Imagine this scenario: you’re facing a prolonged illness or injury, and your ability to work is suddenly at risk. In such challenging times, safeguarding your income-generating potential becomes paramount.
Surprisingly, a staggering 52% of Canadians lack any coverage from their employers. Even among the fortunate 48% with group insurance plans, it begs the question: is that coverage sufficient to meet your monthly financial obligations? It’s a wake-up call to consider the importance of insuring your income to secure your financial well-being.
Situations to Consider Individual Disability Insurance
Individual disability insurance can be a game-changer in several critical scenarios. If you find yourself uneasy about the “definition” of disability in your group plan or the unsettling fact that your employer holds the power to modify or terminate it at will, it’s time to consider securing your financial future independently. This is especially crucial for business owners who depend on income sources like corporate profits and dividends, which are often uninsured. Even if you have group coverage, limitations within the plan may leave you without adequate protection for your income. Individual disability insurance steps in as a vital solution, ensuring that you have comprehensive and reliable coverage tailored to your unique circumstances and needs. Don’t leave your financial security to chance; invest in peace of mind with individual disability insurance.
Three Viable Options to Consider
When it comes to protecting your ability to earn an income through disability insurance, there are three compelling options to consider, each tailored to different financial scenarios and needs.
1- One option worth considering is purchasing an individually owned plan designed to cover the majority of your lost income – whether it’s personal or business-related.
2- If you already have group coverage but want to ensure you’re adequately protected, especially if you’re in a higher income bracket, acquiring an individually owned plan as a top-up could be a wise strategy to bridge potential gaps in your financial security.
3- Secure your financial future by purchasing an individually owned plan that acts as a reliable offset to your group coverage. This strategic move ensures you’ll have a safety net to rely on should your group coverage unexpectedly cease, with the added advantage of potential premium discounts.
See the following graphics for an illustration of two scenarios; getting a top-up and insuring the full amount on your own.
Group Top-Up Using Individually Owned Disability Insurance
No Insurance or Group Offset
Conclusion
In a world where financial stability is paramount, it’s clear that your ability to earn a living is your most valuable asset. The unforeseen twists and turns of life can jeopardize this priceless resource, making disability insurance a crucial safeguard against uncertainty. At Evergreen Wealth Advisory, we understand that every individual’s financial situation is unique. We have a team of experienced finance and insurance experts ready to help you navigate the intricacies of disability insurance, ensuring you have the protection you need. We can work with you to find a disability insurance plan that aligns well with your distinct circumstances. Contact us today and take a significant step towards securing your financial future.