How to Financially Prepare Yourself for a Serious Injury

Prolonged absence from the working world (and your paycheck) can wipe out savings, put your home at risk, and cause serious disruption of family life. Follow these steps to ensure financial stability in case of serious injury.

Instructions

Difficulty: Easy

1. Transfer as much financial risk of loss due to accident and injury to an insurance company through a comprehensive health insurance plan.
2. Ask your benefits counselor if you are covered by any employer-paid disability income insurance, and if you are, find out how much income it will replace.
3. If self-employed, determine if any professional association or organization offers group disability income insurance to its members.
4. Consider buying your own disability income insurance policy from a reputable carrier.
5. Set aside at least three months - preferably six months - of liquid savings for health policy deductibles and exclusions, short-term lapses of income, and filling in any gaps between the end of your sick leave and any payment of disability benefits.
6. Purchase quality safety equipment and clothing and make safe practices a priority both at work and at home.

Tips & Warnings

• Many employer benefits packages provide opportunities to purchase accidental death and dismemberment insurance (ADD).
• Business owners might want to consider a "sinking fund" against unexpected losses due to the sudden and prolonged absence a partner or key employee involved in an accident.
• Group disability insurance (LTD, STD) premiums are much lower than individual disability insurance premiums.
• You are many times more likely to become disabled for six months or more than you are to die prematurely.
• If you are a business owner, don't fool yourself into thinking that you could run your business from a wheelchair or a hospital bed; your lowered productivity could drain the company of vital resources.
• High-risk vocations probably won't qualify for accident or injury insurance, so setting aside funds may be the only option.
• Workers Compensation Insurance does not cover losses due to accidents off the job.