Protect Your Most Valuable Asset: Your Income

A few weeks ago, I talked about Paying Yourself First by prioritizing your savings for emergencies as well as your retirement. Today I’d like to talk to you about another kind of protection that is equally as important.

If someone were to ask you what your most valuable asset is, what would your response be? Some might say “my home” or “my car”. I would argue that your income is your most valuable asset. In a world where we are required by law to insure our vehicles and our homes, it’s interesting that no one is required to protect the one thing that generates more income than anything else: our lives.

Of course I’m referring to life insurance. Now, you’re probably thinking one of two things: 1) “Here comes another sales pitch from a life insurance guy”, or 2) “I’m a young professional with no family of my own; why in the world would I need life insurance?” To begin, I am no longer a life insurance agent, however I spent enough time in the industry to recognize the value of such a powerful tool. This is in no way a sales pitch; I can’t sell you insurance if I wanted to. I merely recognize the value of protecting what you love, to make sure that they are taken care of if that inflow of money were to ever become unavailable.

As for young professionals, there’s never been a better time to protect your family, even if you haven’t met your spouse or had any children. Why? Because, quite simply, life insurance is the only “age based” asset out there. For instance, if you, your grandmother or your 4-year old niece wanted to purchase stocks or bonds, all three of you would pay the same price. With life insurance, however, your cost is based upon your age and your health. Since you’ll never be any younger or healthier than you are RIGHT NOW, it will never be any cheaper.

Let me ask you a question. How many single 65-year old people do you know who have never been married? The number is probably a very small one, am I right? So even if you’re currently single or with no children, chances are that you won’t be that way forever. Put it this way: if you could go back and lock in gas prices 20 years ago so that you would pay that price for the rest of your life, would you do it? That’s what life insurance allows you to do; you can pay your premiums for your current age and health for a certain amount of time or even for the rest of your life.

So think about your family (or your future family), and consider ensuring they can live off of your income no matter what. Life insurance benefits aren’t a lottery ticket, but rather a way for your family to sustain in your absence if anything horrible were ever to happen to you. No amount of money could ever replace your presence, but replacing your income would make a huge difference if you were gone.


~ by Scott L. Clark on August 23, 2010.

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