If you were asked to identify your most valuable financial asset, what would you answer? Your home? Your investments? Your savings? If so, you’d be in good company. Yet none of those things are possible without income.
“Income is our most valuable asset,” says Sandra Botcher, Vice President-Disability Income Insurance at Northwestern Mutual. “And it’s more important than ever to protect our ability to earn income.”
Northwestern Mutual’s 2013 Planning and Progress Study illustrates the income pressure many continue to experience in this ever-changing economy. According to the study, Americans feel like they’re falling behind in their savings goals, and nearly a quarter of those surveyed said they’ve dipped into their retirement or savings in the past few years to tide them over.
“Clearly, there remains anxiety about the economic environment,” says Botcher. “The good news is, there are simple steps we can take to protect our ability to earn income. And when we do, we free ourselves to live the life we envision—today and in the future.”
What’s involved in protecting income? There are two basic factors that can impact our long-term ability to earn money: death and disability. Death is inevitable, so most people appropriately purchase life insurance to protect the financial welfare of those who depend on them. However, the economic hardship caused by a disability is just as real, but often overlooked.
“In fact, we are twice as likely to become disabled before the age of 65 than we are to die prematurely,” says Botcher. “Even a relatively short disability could have a significant impact on our ability to meet our basic expenses, let alone our short-term savings and long-term retirement goals.”
Only a minority of Americans purchase disability insurance, in part because they don’t realize how easy it is to become sick or injured to the extent that their ability to work would be affected.
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