Have you ever broken a bone or gotten mono? Were you able to keep working? In many cases of injury or illness, people have no problem going right back to work or returning after a brief hiatus. But what happens if you have a stroke, get hurt in a car wreck or contract a long term illness? When you are unable to work, your bills still have to be paid. Your family still has to eat. So how do you pay for all of that in the event of a disability and what other concerns should you address in advance? These are the tools that should be in place before a disability occurs:
Disability Insurance: Disability insurance will replace a portion of your income in the event of a prolonged sickness or injury. There is usually an elimination period during which you have to cover your own costs and after that has been satisfied the income will begin. Often this basic coverage can be offered through your employer as part of the employee benefit package but many times people choose to supplement with an additional personal policy. There are several riders, or additional benefits, that can be added to the contract to make it more robust and suited to your individual needs. If you are unsure how to interpret your employee benefits or whether you need supplementary insurance outside of that, contact your financial advisor so that she or can do an analysis and help you plan properly.
Durable Power of Attorney: A durable power of attorney is a legal document that allows another person to act on your behalf with regard to legal or financial matters. This can include a wide range of tasks such as making investment account withdrawals or paying another person’s bills. Not every disability requires that this document be enforced but it is something you want in place ahead of time in case it is needed. Depending on the level to which someone may be incapacitated, this can be a tremendous responsibility to ask of another person so it should be someone you trust and with whom you have discussed this designation. It is also worth noting that just because you are married to someone or are their parent that does not give you the right to make their decisions for them. This document must be in place for one adult to act on another adult’s behalf. Consult your estate planning attorney to learn more and to discuss your options.
Advanced Healthcare Directive: This document will include a provision that allows you to assign someone to make your healthcare decisions for you in case you are unable to do so yourself. Like the DPOA, this responsibility is not one that everyone is willing to take on so you should discuss your wishes with someone before appointing them to be certain everyone is on the same page. An attorney should be consulted for this document as well as she or he can best advise you as to how it works and when it can be implemented.
Five Wishes: The 5 Wishes is a document that allows a person, in their own handwriting, to clarify their wishes for medical treatment and designate a power of attorney for healthcare decisions. It is considered a legal document in the state of Tennessee and can be utilized without an attorney as an alternative to the Advanced Healthcare Directive. Make sure someone knows where this booklet is kept should it be executed, as you would with any other legal document.
As you can see, a disability event can have far reaching consequences to those who are unprepared for it. When you are ready to start planning for the unexpected, contact your financial advisor and ask for assistance so that all bases are covered and no questions are left unanswered. While not everyone will experience a disability in their lifetime, for those who do it can be devastating both financially and personally. Don’t let procrastination keep you from protecting yourself and those you love most. Help is always available to those who ask for it!