A rating or better) so that you can get the best possible combination of value and coverage. Get disability insurance. Disability insurance provides you with an income if you become unable to work due to an illness or accident. Group disability insurance is often available through larger employers, but you can also buy your own private policy as an individual. Policies vary as to their definition of disability, the amount of income they will provide, the waiting period before you start receiving benefits, how long your benefits will last and more.
Get long-term care insurance. Nursing homes are not just for the elderly, but are also needed by some younger people with long-term disabilities. Long-term care insurance is generally affordable, and the younger you are when you purchase the insurance, the less expensive the premiums. In addition, some 21 states now offer either tax credits or deductions for long-term care insurance premiums. Again, terms and benefits vary greatly from one policy to another, so get assistance from your insurance professional if you need it.Have an emergency fund.
In addition, you’ll probably have medical expenses that are not covered by health insurance. Prepare for this by keeping some cash in a liquid account, such as a money market fund. I recommend three to six months’ worth of expenses.The Bottom Line: Losing your ability to earn an income, even for a short period, can be financially devastating. However, the right combination of preparation and insurance will go a long way toward insulating you from the worst financial consequences of becoming disabled. The Armchair Millionaire Weekly Survey: Ever thought about declaring bankruptcy?
Responses to 'Armchair Millionaire Community Bulletin: Dealing with Disability'