The Game of Risk

Insurance is all about risk. As consumers, we identify our risks and buy insurance to counter these risks. For example:

You own a home. You spend large amounts time and money obtaining and maintaining your home. You risk losing that investment and hard work should the unthinkable happen and fire consumes it, or a thief burglarizes or, or even worse, someone hurts themselves within it and threatens to sue you for a million dollars. The solution? Simple. Buy a property insurance policy.

You own a car. Again lots of money and maintenance. Again, the risk of damage, theft or lawsuits. The answer? Once again, we turn to insurance to subdue our worries.

What else can one insure? A boat? A cottage? An office building? There are countless assets that we safeguard against loss by purchasing insurance.

Sadly, the in the effort to protect what we have worked so hard to obtain, many of us forget the most important asset we will ever have. It is the asset of which obtains all others. It is our ability to earn an income.

Just think if for the rest of your life, you could never earn another dollar. Forget the house and car, that’s for sure. How would you survive? With no income, how would you afford food or even basic shelter? While investments and savings can provide a short-term solution, they seldom offer a permanent source of funds. For example, if you put away 10% of your income for 10 years, you should still only have enough money to survive at your current standard of living for about 1 year, 2 at most if it invested at a high interest rate. The average "working" life of a person is 45 years. At 10% every year for those 45 years, you still only have roughly 5-10 years worth of savings to maintain your current life style. Although this is only an example, the point illustrates itself. An injured person, who is unable to earn an income, would likely find himself or herself in quite a financial bind.

Disabilities are a very real risk, and they could happen to anyone, regardless of their profession, age or health. Disabilities, unfortunately, also do not have much regard for such things or your level of savings. A disability simply does not wait around until such time as you are ready to live with it. Even if a disability does not leave you completely incapacitated, you may very well be left unable to perform your previous occupation and may need to settle for a lower paying profession or position.

In order to truly protect that which is valuable, one must go to the root of that which threatens it. Before we insure what we own, we should first insure our ability to even own it. With the discounts available through group plans, Disability (or Income Protection) Insurance is quite possibly the cheapest peace of mind you can buy.