Nobody likes to think about or talk about the possibility of suddenly becoming disabled and unable to work. But the best time to plan for the possibility is before it happens, not during or after. All it takes is one illness or one accident to prevent you from being able to handle your daily responsibilities—but if you’re proactive, and you create the right contingency plans, you don’t have to worry about it ruining your livelihood.
One of the most important things to consider is getting disability insurance. Though it comes in many forms, with many variables dictating its use and effectiveness, the general principle is always the same; disability insurance exists to compensate you while you’re unable to work due to an illness or injury.
Depending on where you work, you may have some type of disability insurance as an employment benefit. If that’s not available, you may be able to buy disability insurance through your employer, or through a professional association. Failing those options, you could always buy an individual policy, just like you would car insurance or any other type of personal insurance.
Short-term disability insurance usually replaces a portion of your base salary, like 60 or 70 percent, and is paid out up to several months, or up to a year, depending on your policy. The wait period for this compensation is frequently low. Long-term disability insurance, by contrast, replaces a lower portion of your base salary, like 40 or 50 percent, over a much longer period of time—sometimes up to retirement age, or up to the time when the disability ends. The waiting period for this type of policy can range up to several months. Timeframes, payouts, and other variables will vary based on your specific policy.
Purchasing disability insurance is one of the best things you can get to protect yourself from the possibility of being unable to work. If you have a family to support, you may also consider getting a life insurance policy, which can provide benefits and replace a portion of your salary after your death.
If you’re a leader in your business, you’ll also want to go through the process of succession planning. There are different ways to approach this, but in general, the idea is to name a person (or several people) to replace you in your current role, and distribute ownership of the company according to your wishes. This may include valuing the company, so you can accurately determine ownership stake, and documenting which steps should be followed if and when you’re no longer able to work.
Depending on how you were injured and how you became ill, you may be able to take legal action as a way to replace your lost income (and compensate for any costs associated with that injury). For example, if you were personally injured due to the actions or negligence of another person, you may be entitled to any medical costs you incurred as a result of that injury, as well as at least some of the salary you’ve lost as a result of the injury. Car accidents, on the job injuries, and medical malpractice are just some of the sources of personal injury that could qualify.
Deciding How to Qualify Yourself
After finding yourself unable to work, you’ll need to determine whether to apply for disability benefits and what type of benefits to apply for. The Family and Medical Leave Act (FMLA) guarantees employees the ability to take up to 12 weeks of unpaid leave to deal with an injury, illness, or injury or illness of a family member, so you may be able to take advantage of it. Otherwise, you’ll need to consult with a doctor to determine whether short-term or long-term disability is more appropriate.
Of course, you’ll also need to undergo a period of psychological recovery, since experiencing a disabling injury can be traumatic and being out of the workforce can be trying, to say the least.
- Give yourself time. You aren’t going to recover overnight. Take several days to several weeks to start the recovery process.
- Focus on the present. It’s easy to get lost in thinking about how you’ve worked before and how you might work in the future, but it’s much more effective to spend your time in the present moment.
- Find something new to occupy your attention. It’s helpful to find a new focus, like a hobby or short-term goals for improvement, to occupy your time and attention.
It’s not a fun topic for discussion or writing, but you’ll need to think about the possibility of disability if you want to protect your financial future. Think carefully about your disability and succession planning, and be proactive to mitigate your risks.