Armchair Millionaire Community Bulletin: Dealing with Disability
Losing your ability to earn an income, even for a short period, can be financially devastating. However, the right combination of preparation and insurance will go a long way toward insulating you from the worst financial consequences of becoming disabled.
New York, NY (PRWEB) January 4, 2005 -- According to the American Council of
Life Insurers, nearly one-third of all Americans will suffer a serious
disability between the ages of 35 and 65. And while Social Security is available
for those with long-term disabilities, the coverage is minimal--certainly not
enough for any extras like sending children to college. This means you need to
have your own back-up plan in place.
While a disability and its
associated loss of income is certainly no fun, it doesn't have to spell
financial catastrophe. These two stories from the Armchair Millionaire are
testament to that:
"I was on a short term disability at one time. The
insurance payment helped out but did not cover the amount my salary did. You
have to learn to budget your money and live within your budget. You may have to
go without certain things, but you can survive." --Dick B.
"I was unable
to work for a short time and my disability insurance really helped out. It
didn't cover my entire salary, but we just didn't spend during those months."
--Mary
It seems to be human nature to be in denial about the very real
chance of an event--like a car accident--changing our lives forever. As a
result, most of us are not as prepared as we should be when something really
does happen. My checklist provides the basic steps you should take to stay dry
on a rainy day.
The Armchair Millionaire's Checklist for Dealing with a
Disability:
Get help from an insurance professional. The best insurance
agents will act as a consultant to you, helping you to evaluate your insurance
needs and periodically reviewing your coverage as your needs change. Find an
independent agent that works with at least several financially sound insurance
companies (those with an A rating or better) so that you can get the best
possible combination of value and coverage.
Get disability insurance.
Disability insurance provides you with an income if you become unable to work
due to an illness or accident. Group disability insurance is often available
through larger employers, but you can also buy your own private policy as an
individual. Policies vary as to their definition of disability, the amount of
income they will provide, the waiting period before you start receiving
benefits, how long your benefits will last and more. These features can be
complicated, so have your insurance professional explain the terms and benefits
of different policies as needed.
Get long-term care insurance. Nursing
homes are not just for the elderly, but are also needed by some younger people
with long-term disabilities. Long-term care insurance is generally affordable,
and the younger you are when you purchase the insurance, the less expensive the
premiums. In addition, some 21 states now offer either tax credits or deductions
for long-term care insurance premiums. Again, terms and benefits vary greatly
from one policy to another, so get assistance from your insurance professional
if you need it.
Have an emergency fund. Regardless of the type of
insurance you have, you are likely to still have a gap between the time you lose
your income and the time your benefits kick in. In addition, you'll probably
have medical expenses that are not covered by health insurance. Prepare for this
by keeping some cash in a liquid account, such as a money market fund. I
recommend three to six months' worth of expenses.
The Bottom Line: Losing
your ability to earn an income, even for a short period, can be financially
devastating. However, the right combination of preparation and insurance will go
a long way toward insulating you from the worst financial consequences of
becoming disabled.
The Armchair Millionaire Weekly Survey: Ever thought
about declaring bankruptcy? Log on to www.armchairmillionaire.com and let us know.
Lewis
Schiff founded the Armchair Millionaire Web site in 1997. His first book, The
Armchair Millionaire, was published in 2001. Schiff's newest report, "How to
Know When You Are Rich," is now available at www.armchairmillionaire.com.
Contact
Information:
Lewis Schiff
Armchair Millionaire
877-833-2823
http://www.armchairmillionaire.com
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Source : http://www.prweb.com/releases/2005/1/prweb191274.htm