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Protect Your Family When Disability Strikes

Elizabeth Brokamp
November 10, 2007

Most of us know enough to draw up a will, especially if we have dependents to protect. But what a majority of folks fail to do is to secure disability insurance, something they are far more likely to need. Don't believe me? Then try these statistics on for size:

  • According to the Social Security Administration, "a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching retirement age."
  • One in seven Americans can expect to be disabled for five years or more before retirement, according to the Health Insurance Association of America.
  • Disability causes nearly 50% of all mortgage foreclosures, compared to just 2% caused by the death of the primary breadwinner, according to Health Affairs.

I learned about the need for disability insurance firsthand when I was just 30 years old. Newly married and in great health, I didn't give a single thought to disability insurance. Luckily, my employer did. When I became pregnant later that year, I was put on bed rest for the last two months of the pregnancy, and my husband and I were covered. We had plenty of things to worry about health-wise; what a great relief not to worry about finances, too.

Contrast that to just a couple of years later when I worked for a new employer without disability benefits. Pregnant with our second child, what the doctors pronounced a fluke the first time around became a reality again -- bed rest for four months this time. (That's eight missed paychecks, to be exact.) Our family wasn't financially ruined, but we were extremely financially stressed.

Could you weather four months without a paycheck and still emerge OK? Given that an estimated two-thirds of American households live paycheck to paycheck, the odds are that your household would greatly miss your financial contributions. What if your disability lasted even longer -- years, not months?

If that thought has you worried, you should get busy looking into disability coverage. Here are the questions you'll want to consider: