Just like life insurance, disability insurance is protection for your future income. In the case of disability insurance, though, the event covered is your inability to earn a living wage as a result of poor health or injury.

If you are involved in a serious accident or develop a disabling disease, how will you continue to support yourself, let alone your dependents? It's surprising to many people, but disability insurance is actually more important than life insurance. Consider these facts:

  • The Social Security Administration's Disability Benefits publication claims that a "20-year-old worker has a 3 in 10 chance of becoming disabled before retirement age." For us mathematically challenged folks, this means 30% are likely to need some kind of income protection for disability.

  • Government statistics show that the same 20-year-old has only a 17% chance of dying before age 65, and these odds continue to decline as we live longer and longer (and eat more leafy greens).

  • Disability insurance is more expensive than life insurance. Think about it. Insurance companies make a living aligning premium costs with the odds of a claim. This leaves little question that disability payouts are more common than life-insurance payouts.

  • Most of us consider health insurance a critical need, especially as protection from serious illness or accident. Does it make sense to prepare for the medical costs of disability but not the costs of food and shelter for our families?

  • Disability insurance protects more members of your family than life insurance, exactly one more -- you! For this reason, even single people who have little need for life insurance should seriously consider disability insurance.

The bottom line: If you depend on your income to pay the bills, you ought to carry disability insurance. Those of you working just for kicks, we suggest you spend your time doing something more entertaining than reading about disability insurance.

The good news is that you might already have some coverage. Many employers provide disability insurance, and Social Security pays benefits to qualified Americans who can no longer work. However, just because you think you can't work doesn't mean anyone is going to send you a check. Insurers and the Social Security Administration have specific ideas of what constitutes a "disability." So even if you're already covered, your policy may be so restrictive as to be insufficient.

So it's not just important to have a disability policy, but to make sure you have the right policy. To learn what features should be included in your policy, read our series on disability insurance. And look both ways before crossing the street.