Putting a value on your potential
What is your most financially valuable asset?
The answer to this question could be quite different depending on your age. A younger person may say their car or a possession, such as a musical instrument, is their most valuable asset.
As people age their home or super is likely to be what they consider most valuable. However, while these answers seem sensible, the real answer is your capacity to earn an income.
‘This ability likely outweighs the value of any other financial assets you have.
Alex, an engineer, is age 40 and owns a car worth $45,000, a home worth $750,000, and his super accumulation balance is around $250,000.
Alex earns an income of $100,000 per year. If Alex plans to retire at age 65, he has 25 years of his working life left.
Based on this, Alex should earn $2.5 million in income between now and the time he retires – not including any salary increases he may receive.
Despite his earning potential being so high, Alex has never considered it an asset. And, while he wouldn’t leave his $45,000 car uninsured and would never let his home insurance for his $750,000 home lapse, he has never considered the impact of losing his future earning capacity.
What are the risks?
The sudden loss of your income could occur due to a major illness or injury which could leave you incapacitated for an extended period, or even unable to ever return to work.
The consequences if the unexpected does happen means that everything you’ve worked for, the security of your family, your home, lifestyle and your ability to save for retirement will suddenly be at risk.
Life, total and permanent disability cover and income protection insurance can help you retain financial security and replace your income earning potential by providing a lump sum and/or regular income if adversity strikes.
Think it won’t happen to you? Think again
You may think the unthinkable will never happen to you but did you know:
That’s why it’s important to protect your most important asset, you.
How much insurance do you need?
The amount of insurance cover you need depends on your individual circumstances. Factors that should be considered include:
It will also differ depending on your specific circumstances, such as your health or pastimes.
Topping up your cover
You can customise your insurance to suit your circumstances at any time. Some of the reasons you may want to apply to increase your cover, include:
Put simply, protecting your greatest asset – your ability to earn an income – just makes good sense.
“Capstone made everything so easy by providing all the templates and support we need which makes me feel comfortable that I am in good hands with my licensee. I would highly recommend Capstone to any fellow Accountant."
“I would recommend Capstone to any accountant seeking to become licenced within the financial services industry. Their personal service and support to me and my firm has been exceptional."
“I joined Capstone Financial Planning in 2003 as I was looking for a Group that could offer a high level of independence and freedom that came from not being institutionally owned."
Willow Wealth Management
“Compliance support and feedback is crucial to our business. The Capstone team are always there to assist us in improving and providing best advice and best practice standards. Their input is always positive and constructive."
Nicholson Financial Planning
“I would happily recommend Capstone as a licensee to other advisers. The Capstone staff are friendly, knowledgeable, and professional, and they are genuinely committed to meeting their advisers' needs. I feel very secure in the knowledge that I have Capstone backing my business.”
Acquire Strategic Advisers
“Capstone’s support has been exceptional and consistent from the time our business made the transition. Capstone is continually trying to enhance their service offerings to their advisers, at both the higher level, and more specific lower levels within our business. They are an exceptional licensee and lead from the front.”
“I can highly recommend Capstone for planners seeking an independent licensee that’s not in your face but provide quality support services. Their service and support is second to none and has allowed us to concentrate on providing our clients with a premium level of service.”
“Having been with Capstone for a number of years, one thing that really stands out is their willingness to help and can do attitude. These are qualities we really appreciate.”