I would like to share a story with you. It’s a story that will be familiar to a lot of you, especially because of its similarities to the classic tale of ‘The Goose That Laid The Golden Eggs’.
In a lot of ways, this story of the Golden Goose is a situation I face every day - but what does this have to do with Financial Planning?
The answer is that the story of the Golden Goose is one that many of my clients across all ages, income levels, and social positions deal with.
Would you insure the Goose, or the Eggs?
It all comes down to a single, fundamental question: If you had the mythical Goose that laid Golden Eggs, would you insure the Goose, or the Eggs?
All of us are alike in basic ways. We all have a source of income, we all carry some debts, and most of us have at least one dependent – a child or a spouse, or both. But one of the fundamental mistakes people make is thinking of insurance as something other than what it really is: Income Protection. Believe me, I know: I was once pretty naive about this subject too. Just like most of my clients, my answer to the question used to be: The Goose, of course!
Despite how fast most people come up with this answer, the answer they offer to my follow-up question is usually the same. When I ask, do you currently insure your income or your car? They almost always reply their car. And yet your income is the Goose in this metaphor, and your car is one of the Golden Eggs. Once you start labelling things like this, the illogic of insuring a car and not insuring your income becomes plain.
Income Protection: The Golden Goose
Income Protection will not only provide you with the means to sustain a lifestyle for you and your loved ones should you be rendered (through illness or injury) unable to work. I urge you to consider this paradigm that is so readily overlooked by the majority of us in our daily lives. While it is undeniably important to insure your Eggs, don’t forget to insure the Goose as well – that is, yourself!
Have more questions? Looking to fund your insurance from your superannuation?
Please get in touch with the team at Inspire CA or Nick Webb directly if you would like to learn more about Income Protection insurance. There are also avenues to structure Income Protection Insurance within your superannuation so that there is no direct hit on your personal cashflow.