- I injured my eye in a minor accident when I first became a full-time freelancer and it cost me $3,000 in medical bills.
- I had enough savings to cover my medical expenses and bills for the month I had to miss work, but I knew I had to purchase long-term disability insurance to cover me if anything were to happen. in the future.
- I purchased a plan, through the Freelancers Union, because I am the sole earner, I am healthy, and I have no passive income streams. I now pay $23 per month for coverage.
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During the first few months after making the leap to full-time freelance work, I had an unfortunate accident involving a piece of cardboard and a short fall to the floor. As a result, I suffered from a scratched cornea. A relatively minor eye injury took a toll on my savings. Two trips to the ER, a handful of visits to an eye doctor, and prescription drugs later, I was $3,000 in the hole. Plus, I ended up taking about a month off.
Fortunately, I had enough money hidden away in my emergency fund to cover lost income during this time and to cover my medical bills. However, the accident also helped me realize how important it is to have long-term disability insurance. So I took out a policy through the Union of freelancers; I pay about $23 per month for my plan, which will cover $2,500 per month if I can’t work. Here’s why I decided to opt for a long-term disability plan.
I am the only breadwinner
Even though I have no dependents, being single means I don’t have a second income to fall back on. Since I am the sole breadwinner in my household, I will have no additional means to cover my bills if I have an accident or am diagnosed with a long-term illness and cannot work. for an extended period. . With a long-term disability, however, I can still receive income.
It’s a scary thought, because I can’t exactly ask my aging parents for money and I wasn’t born rich, and I don’t currently have any side income, but disability insurance might help cover my expenses until I am back on my feet and well enough to work again.
I have irregular income
As a full-time freelance writer, my income can be inconsistent. Because I experience both dry spells and lucrative months, saving up for a sturdy cushion can be tough. Additionally, I live in Los Angeles, which has one of the most unaffordable rental markets in the country. While the general recommendation is to save three to six months of your living expenses for emergencies, what if you can’t work for several years or even decades?
While short-term disability replaces part of your salary for several months, long-term disability can cover longer periods. If I am unable to perform the duties of a writer, after my elimination period, which is 90 days, I can receive a portion of my average income from my disability insurance policy each month.
I will not be able to support myself in the long term if I become unable to work
As I currently have no passive income streams – from an Airbnb or rental income, selling e-books, courses or other digital products – or a side business, once my fund emergency exhausted, I couldn’t to cover my living expenses. When I was looking for disability insurance, I made sure that the policy would replace part of my income until I turned 65.
I took out my policy when I was in good health
I bought long-term disability insurance when I was in my thirties and in fairly good health. Your rate depends on a number of things: the type of work you do; how healthy you are; and your age. Generally, the younger you are when purchasing a package, the cheaper it will be. The older you are when you buy a disability insurance policy, the more it will cost you.
My ability to win is my greatest asset
You may think that the money you have in your savings, your investment accounts, and the equity in your home are your greatest assets. But the truth is, it’s your earning potential. When you can’t work, you won’t be able to add dollars to your bank account, save for short- and long-term goals, or create a lucrative side business.
To avoid falling into crippling debt, when my short-term disability ends, long-term disability coverage kicks in to ensure I have an income when I can’t tap into my most important asset. : my ability to earn money.
Protecting your assets is an essential part of financial well-being. Although it may be unsettling to think about it, without disability insurance, I would risk not being able to pay my living expenses for a long period of time if I became unable to work.