“Your greatest asset is your earning ability. Your greatest resource is your time.”
If you’re like most Australians and other expats, you will have Life Insurance, and perhaps home and car insurance if you own either, but have you remembered to protect your greatest asset..? – Your ability to earn an income. The reality is that this is your most valuable and important asset, and you shouldn’t overlook the ‘peace of mind’ that comes with insuring this.
Let’s put this into context. Consider the case of James, he’s an IT Director in Singapore and is currently 35 years old. James is currently earning $220,000 per year. If James suddenly lost the ability to work, assuming he retired at age 65, he will have lost $6.6 MILLION in future earnings, and this doesn’t even factor in any increases in income. If we then assume that James’ income just keeps pace with inflation, this would amount to approximately $10.5 MILLION in lost earnings.
Now you should have a clear understanding of the magnitude of how valuable your ability to generate an income is. It’s then also important to recognise that every day many will lose their ability to earn an income, for varying periods of time, due to illness and accidents. So just how do you protect your ability to earn an income from unforeseen occurrences..?
Income Protection Insurance
An income protection policy can replace up to 75% of your income in an event that you are unable to work for a period of time. This is designed to cover those expenses that will not cease, such as your rent or mortgage, utility bills, groceries and other regular expenses that aren’t put on hold just because we aren’t working. There is nothing better than the peace of mind provided in knowing that no matter what happens to you, your finances will be covered.
“But I already have Life Insurance and Trauma Cover.., do I need Income Protection as well..?”
Income protection policies are designed to be great supplements to your other insurance plans. The plan will keep you covered from unforeseen disabilities or illnesses that keep you from working and generating an income.
Having an appropriate income protection policy in place also allows you to focus on what’s most important…resting and recuperating to get yourself back to 100%. Without the peace of mind of your expenses being covered, the stress and anxiety of not generating an income will only lead to further problems, both physical and emotional. By having the right protection in place, you can allow yourself to put your focus and energy into getting yourself back to work.
To your financial success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
Book a complimentary consultation here.