What’s your biggest asset?

This is a leading question with an answer that will vary wildly between the very rich – and rest of us. For the rest of us, our ability to earn a living remains our most valuable asset – major Lotto wins excepted.aimages (2)

However, having been around the financial services industry for a while now, let me advise against depending on a serious Lotto win to defend your financial security. Being unable to earn a living through illness or injury is a risk. If you’re income ceases, the impact on your current life style will be significant.

It might therefore, be advisable to consider shifting the risk away from yourself to a third party, specially established to cater for this precise purpose.

I refer, of course, to an insurance company, but beware not all insurance companies are the same, and not all products are the same. It’s as well to seek out the services of a suitably qualified adviser to guide you through the maze of terms, conditions, wordings, and prices in the market. Fortunately, the market for these products has rationalised over the last 20 years, so while complexity still abounds, there at least fewer providers to choose from or confuse the issue, which ever you prefer.

Buying a product which can replace your income – or a substantial proportion of it – need not be a hugely expensive exercise, despite the total amount of money at risk, After all, if you’re 30 years old on a salary of $60, 000, and you expect to work for 30 years..... well, do the math. If you only ever made $60k per year for your entire career (unlikely) your total earnings would be 30 x $60,000 = $1,800,000!!

If some dreaded ailment struck you down when you were 40 or 45, and you couldn’t go back to work, you stand to lose $1.2m or $900k respectively.

I looked at 7 insurers in NZ and to provide ¾ of the above salary ($45K), the average monthly cost was around $60 – less than the cost of one frothy latte per day per month.

To find out more what this means to you, click on this link, fill out the form, and I’ll send you a free personalised summary report.