From Here to Financial Happiness

Day Thirty One Cover Me

On days 18 and 19, we discussed how you would cope if you were out of work for perhaps six months. But what if you never worked again because you suffered a career‐ending disability – or an untimely demise?

If you're single with no dependents, death isn't a financial problem, because nobody would be left in the lurch. Thus, there's no need for life insurance. A disability, on the other hand, could be a huge problem. How would you support yourself if you were physically unable to work and couldn't pull in a paycheck? If you do indeed have a family, how would you support them?

Social Security may pay benefits if you're disabled, but qualifying is difficult: You need a disability that's so severe that it will prevent you from working for at least 12 months or it'll result in death. Even if you are deemed eligible, it can take more than five months for benefits to begin.

With Social Security disability benefits difficult to obtain, many employers provide short‐term and long‐term disability coverage. What if your employer doesn't? What if you work for yourself? Seriously consider purchasing disability insurance. That might seem unnecessary, especially if you have a desk job where you're unlikely to get injured. Keep in mind, however, that most disabilities result not from accidents but from illness.

If you have a family who depends on you financially, you might also need life insurance. Your best bet will likely be a low‐cost term insurance policy, rather ...