Don’t Sleep on this Often Forgotten Safety Net
Last year put a major spotlight on healthcare and the necessity of health insurance. For many who are self-employed or have formed small companies, having health insurance a box that needs to be checked.
For all of us, there is real fear in not having health insurance and having to get treatment or a big procedure where financial ruin is a distinct possibility. Nearly two-thirds of all bankruptcies in the United States were caused by medical issues, according to a 2019 study by academic researchers.
The reality is even if you have health insurance you may still wind up in a financially difficult situation.
There is a second type of insurance that is often overlooked (myself included): disability insurance. According to Sam Syed with Northwestern Mutual, 1 in 3 Americans will incur a disability before the agency of 65. Out of the unlucky 1 in 3, there is a 50% chance that the Disability would be permanent.
The biggest benefit of disability insurance is that you are insuring your current income – or a lessened income level – in the event you are unable to work. It is not fun to think about, but if you cannot earn a living, you are going to put a serious financial burden on yourself and your family. In the worst cases, individuals see additional costs rise including medication, living assistance, or even a change in housing. Disability insurance is vital for financial security and protection from these scenarios. And disaster preppers will be happy to know that coronavirus is covered with disability, as are future pandemics.
The added cost is why many turn away from disability insurance. If you can get beyond the pricetag (which, in most cases, is cheaper than car insurance) and look at the policy as a safety net, it’s much more palatable.
This type of coverage is very important for freelancers in particular. While larger companies often offer more comprehensive benefits – like a 401k, health insurance, life insurance, and disability – as a freelance you need to provide all of this for yourself.
When it comes to insurance, it is a no-brainer to have home, car, health insurance and usually life insurance. Whether you are a long-term freelancer, or running your own business, disability is vital to your long term security.