Long-term disability insurance helps replace your income if you are unable to work due to illness or injury. Many people consider this coverage a luxury, when in fact, it should be considered a necessity for those who don’t have other financial resources they could tap in the event of a long-term illness or injury. Even if you do have other financial resources, would you want to use them to pay your monthly bills? If you saved 5% of your income each year, a 6-month disability would eat up 10 years of savings!

Don’t think it could happen to you? Although your chances of having a disability increase as you get older, illness and injury can happen at any age. Car accidents, sports injuries, back injuries, and disease are just a few examples. The likelihood of being disabled is far greater for most people than the likelihood of dying during a given period of time, yet millions of people carry¬†life insurance¬†(another important piece of your financial safety net), but not disability insurance. Consider disability insurance as insurance for your ability to generate income.

Ask yourself this question: Could you and your family live without your income for three months? Hopefully, the answer is yes since you’ve built up that emergency fund. But what about six months? Or a year? What if you not only have to live without your income, but you also have the added expense of medical bills? If the answer is no, you should consider disability insurance. Employers often offer this coverage via a payroll deduction, which may be tax-deductible and more affordable than one-off policies through an insurance agent.