Most of us rarely consider the fact that we could become disabled. Yet being unable to work could result from any number of circumstances. Cancer, heart disease, worsening medical conditions like diabetes, injuries caused by an accident, and behavioral health illnesses are just a few examples of common situations that can lead to significant time out of work.
Why you might need disability income insurance
Consider what might happen if you suffered an injury or illness and couldn’t work for days, months, or even years. If you’re single, do you have other means of support? If you’re married, you may be able to rely on your spouse for income, but you probably also have many financial obligations, such as supporting your children and paying your mortgage. Could you meet those obligations using only your spouse’s income? What if you’re selfemployed or own a business? Can your business continue to provide you with needed income if you’re not able to actively participate?
If you work and earn a living, consider your need for disability insurance. But how much disability insurance should you have? The answer typically depends on three factors: how much income you’ll need if you become disabled, how much money you can afford to spend on premiums, and how much insurance you’ll be able to purchase under the insurance company’s guidelines. Here are some expenses you may face if you become disabled.
- Medical expenses: You can expect your medical expenses to rise when you suffer a disability. Assuming that you have health insurance, you’ll probably have to satisfy a deductible as well as outofpocket costs like copays, which may increase your expenses immediately after your disability occurs. In addition, if you suffer a longterm disability and are forced to quit your job, your group medical insurance coverage may be terminated.
- Living expenses: What if a disability prevents you from being able to drive, clean your home, mow the lawn, or cook for yourself and your family? Will you need to hire household help to take care of daytoday activities that you can no longer do? Hiring help can be a substantial, unexpected expense when you become disabled.
- Childcare expenses: If you have young children and both you and your spouse work, you know how expensive child care is. Can you afford it if you or your spouse should become disabled and unemployed? The disabled partner may be able to care for the children at home, but not if his or her disability is too limiting. On the other hand, if you currently stay at home with your children, you may be forced to return to work if your spouse is disabled, and you may have to contend with the unforeseen additional expense of child care.
Do you already have disability insurance?
How much insurance should you buy?
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