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Making a seven-figure income year in year out is the dream of many workers across the country and around the world.
Only 1% of American workers can claim that level of a salary. So, if you make more than a million dollars a year, then you belong in this 1%. While the income is indeed substantial, it requires adequate planning to protect it and make judicious use of it. With a 3.26% average annual inflation rate, just the passage of time alone will eat away at your seven-figure income. Also, being a high earner has a time frame because you are likely planning to retire someday. In addition, taxes gulp a significant portion of the money, and there are family expenses like children’s college fees and mortgages that may take a sizeable part of the income.This presents a problem that every seven-figure earner deals with: how to protect their finances.
There are several ways you can protect your seven-figure income depending on what you’re interested in financially. For some, it is investing in a lucrative business that guarantees a high ROI. For others, it’s all about acquiring assets. However, whichever options you choose, two vital financial plans are indispensable in your income management: life insurance, which guarantees both living and death benefits and disability insurance, which protects your income.
One of the major concerns of many American parents is college fees payment. You can buy life insurance to cover student loans and other college expenses easily. Apart from college needs, life insurance can be used to provide child support and alimony as well as covering expenses for special needs children.
Life insurance can be used to protect your business either as a sole owner or a partner in a jointly-owned enterprise. This coverage can help your business in different ways, including allowing you to borrow against the cash value of your policy for your business needs. You may also have a “key man life insurance policy” (also known as a business life insurance policy) which protects your interest in a partnership business.
The bigger your estate, the higher the taxes you’ll pay. At the federal level, for instance, you are expected to pay an estate tax on any estate that is worth more than $5.25 million when it changes hands. Sometimes, the tax could be as high as 40%. To combat this, you can have a life insurance policy to covers the charges. This will protect your assets and ensure your estate is transferred to your beneficiaries while maintaining its value.
This is considered as one of the top reasons why people buy life insurance. As a high-income earner, you might think paying for your funeral expenses shouldn’t be difficult for your loved ones. Of course, it shouldn’t.
However, considering the rate at which funeral costs have been rising in the past few decades, it is worth making preparation for it while you are still alive. According to the Federal Trade Commission, bronze or copper caskets today sell for as high as $10,000. Having a policy for this specific purpose will eliminate the need for your heirs to take out of the inheritance you left for them to bear the funeral cost.
These days, there are two major ways through which people voluntarily leave their high-paying jobs. It is either by quitting at the retirement age or by being forced out at the peak of their career because of a disability. According to the Council for Disability Awareness, every 7 seconds, an American worker experiences a disabling injury or illness. The National Health Council also revealed that around 133 million (or 40%) Americans are suffering from a chronic disease. By 2020, the Council forecasted that the figure will rise to 157 million. All the statistics are pointing to one fact, the need for disability insurance.
Having a seven-figure income is great, but only if it lasts. Keeping that income is much more important. Whether you are an entrepreneur or a salary income seven-figure earner, the ability to keep making the same or higher income is your greatest asset. And as such, it should be protected with a disability insurance policy which gives you financial coverage if you become disabled. Here are some of the main reasons you will need disability insurance as a high-income earner:
As you can see, the needs of individuals vary widely when it comes to life or disability insurance. However, the following tips will help you decide the amount of coverage to purchase:
How Much Is Your Income?
Your income is very essential in determining the amount of life or disability insurance you are going to get from an insurance career. With a seven-figure income, you will need to purchase coverage in proportion with your income, so as to guarantee adequate protection for you and your loved ones.
Your Business Interest
If you are getting coverage for business purposes, you will need to consider the percentage of your shares in the enterprise and buy your insurance policy accordingly.
Age is another determinant in the insurance market. The younger you are, the lower your chances of death or disability and the lower your premiums.
Insurance companies are very interested in your health status. If you are considered a high-risk applicant or have a pre-existing condition, you may need to pay higher for your policy. You may not even be eligible with some insurance providers.
You need to consider the number of your dependents and the type of coverage you think will be enough for them both in the event of disability or if you pass away.
You can work with an agent to find a life insurance policy and can get a personalized, free, and no-obligation life insurance quote in just a few minutes. It’s that easy to start protecting your family’s financial future! Requesting a life insurance quote through AIG Direct is now faster and easier than ever!
With My Term Life Guy, you can get quality term life insurance coverage for less. Call now and save up to 60% on your term life policy compared to the same coverage through other carriers. That means you can get similar coverage for your money – and that’s always a good thing!
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