You’ve got a machine just sitting around your house. It’s a money-printing machine, and it’s perfectly legal. This machine is expected to print $75,000 this year before taxes. You’ll use that cash to pay your household expenses.
Each year, the machine will print 3 percent more than it did in the previous year, and it will continue doing so for the next 40. That means, over its lifetime the machine will print $5,655,094.48, easily making it your most valuable asset today.
Yet there it sits, maybe in your garage, between an inherited set of golf clubs and a wheelbarrow with a flat tire, unprotected. Uninsured.
The machine, of course, is you, or more specifically, your ability to generate an income. It didn’t come cheap. You and your parents invested years of training and likely tens of thousands of dollars in hopes that your machine would not only support you financially for a lifetime but launch another generation as well.
We don’t question the need to buy insurance for the things our money machine purchases. But few of us know if—or at least how and to what degree—their income-generation engine is protected.
In order to help you navigate the two most complex forms of personal insurance, I’ve created two “apps”–in the form of Excel spreadsheets–that you can use to create a plan, analyze any policies you have and obtain apples-to-apples quotes for new policies, if needed. You can find the backdrop for the disability income exercise HERE and the long-term care exercise HERE, or just jump right in with the instructions given below:
These exercises are each a three-step process. Step One is to determine what you need. This is accomplished by writing out a Disability Plan if you are in your 30s, 40s or 50s. If in your 50s, 60s, or beyond, you need to articulate your Long-Term Care Plan. Not everyone needs insurance, but everyone needs a plan. Start the process by writing out a paragraph beginning with the following sentence: “If I became disabled [suffered a long-term health care incident], here’s how I would handle that financially…”
Step Two is to understand any coverage that you already have. The online exercise includes a template with spaces to fill in for the primary features mentioned in this two-part blog series. Once you have completed the template, you’ll better understand the coverage you have. Step Three is to determine what you actually need and want in a policy and create a template to retrieve quotes and find the best coverage. You’ll be better prepared for the engagement with the insurance agents because your template will ensure you’re comparing apples-to-apples, a very difficult thing to do with long-term disability income insurance and long-term care insurance.
Click HERE to access the long-term disability income app and HERE to access the long-term care app!