The Need for Long-Term Disability Insurance

So few have it, and so many need it

Jun 17, 2010 | WRITTEN BY CHRIS RUSSELL

Most people think the odds of becoming disabled are about the same as winning the lottery. They don't think about the need for long-term disability insurance because, honestly ... how much do they really "need" it?

The answer is, a lot. And the kicker is that, if something bad happens and you don't have that insurance in place, it's too late to get it. You then have a person at home who is unable to produce an income, yet still needs to be cared for.

Long-term disability insurance is one of the most underinsured areas that the average person has. It is especially needed in families where there is only one income earner. If that person becomes unable to work, then the family will have big-time money trouble.

So where do you get this kind of insurance? How much do you need? Is it just for the income earners, or do all adults in the house require it?

Hear Dave's answers on long-term disability insurance.

And one more thing: As long as we're on the subject of disability, don't bother getting a short-term policy. There's another name for that—it's called the emergency fund. If you are in a car wreck and can't work for a few weeks, then the savings you have built up in Baby Step 3 will cover you until you're back at the job. If you aren't at that point yet, you still shouldn't get a short-term policy. But you should get moving ... as in, get out of debt and get that emergency fund saved!

Reader Comments (3)

What if we are retired?
Member at 6:26 PM, June 17 2010
I disagree. A short-term policy is a woman's Maternity Leave money in the case of pregnancy at many companies.
Member at 8:12 PM, June 17 2010
My company offers disability insurance. Take full advantage or seek elsewhere?
Member at 7:07 PM, June 20 2010

Want to join the conversation? Get started here.

What's inside of
Dave Ramsey's
MyTotalMoneyMakeover?

My Total Money Makeover is a subscription site helping people discover financial peace by walking them through Dave Ramsey's baby step process for dumping debt and building wealth.
Learn More

Membership Includes: