Facing a catastrophe unprepared is a bad situation for any company -- and an even worse scenario in our own lives.

The best companies are smart enough to see risks coming, and take steps to avoid them. Witness Southwest Airlines (NYSE: LUV), which often locks in fuel costs to protect itself against volatile prices. Companies that don't prepare for potential perils can find themselves in serious trouble; just ask BP (NYSE: BP), Transocean (NYSE: RIG), and Halliburton (NYSE: HAL), all caught flat-footed when their fail-safes for a deep-sea oil leak, uh, failed. The disaster's left all three companies open to unknown and potentially massive costs, threatening BP's dividend and driving investors away from their shares.

Just like companies, we need to recognize the risks we face, and take action to protect against them. Sure, we buy car insurance and home insurance just in case of accidents, fire, or flood. We get educations to improve our chances of staying off the unemployment line. But there's one serious risk many of us never consider: Long-term care.

According to the National Academy of Elder Law Attorneys, your odds of experiencing a car accident are 1 out of 240 (0.4%). Your odds of having a house fire are 1 in 1,200 (0.08%). But your chances of needing long-term care are 1 in 2, or 50%. Even so, more people insure themselves against the first two risks than the third.

The American Association for Long-Term Care Insurance recently offered some encouragement, noting that 35% of recent long-term care insurance buyers paid less than $1,500 per year. Its executive director added, "Individuals mistakenly have been led to believe that long term care insurance costs thousands of dollars. A significant number of individuals today pay between $10 and $20 a week. That's a highly affordable way to protect $150,000 to $250,000 of future care."

Of course, note the source. As an industry trade association, the AALTCI is far from unbiased. It probably would not like to point out that long-term care can get considerably pricey for many Americans, depending on their age and other factors. Still, long-term care insurance is well worth investigating. It can be smart to lock in low costs by purchasing a policy well before your golden years arrive.

Take some time to look into whether such insurance a smart move for you. There's little point in seeking great stocks to boost your cash inflow if you're not also reducing your chances of experiencing massive cash outflows.

Longtime Fool contributor Selena Maranjian holds no financial position in any company mentioned. Southwest Airlines is a Motley Fool Stock Advisor pick. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.