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While life insurance to provide for dependents isn't an issue
for a single person without kids, disability
insurance is more crucial for a single person
than for someone who is part of a couple.
And, as is the case with a home equity line
of credit, getting that insurance while you
are employed and healthy is vital, because
if you wait until you need it, you probably
won't be able to get it.
"I've had people in my office applying for disability insurance that seem to be in great health, but they have a health issue that doesn't seem that big of a deal -- like vertigo, for example," says Larry Saffer of Guardian Life Insurance. "I have to tell them that our conversation is over because that kind of pre-existing condition disqualifies them for disability insurance."
Saffer recommends that single
people consider buying a long-term disability
policy where the payments remain level and
coverage is guaranteed. A policy that will
not only pay if you can't work in your current
occupation, but that will also make retirement
plan contributions for you, is essential as
well. "A lot of times people just think
about disability insurance paying their bills
when they can't work," he says. "But
if you can't work for a period of time, you
also aren't making your retirement plan contributions
and not having those can really affect you
20 or 30 years down the road, especially if
you have a long-term disability."
Long-term disability policies
kick in after 90 days of disability, which
is why you need to have an emergency fund
or home equity line of credit. Enright agrees
that disability insurance is vital for single
people during their working years and that
a long-term
care insurance policy is also a good idea
to provide for a post-retirement health condition
that requires third-party care, whether in
your own home or in an assisted-living or
nursing home facility.
When to retire
Every year you work in your 60s -- especially
past age 65 -- is one more year that you are
saving and deferring tapping into your retirement
accounts. And if you defer taking your Social
Security benefits until age 67 or 70,
you'll get a bigger benefit than if you take
them at age 62 or 65. |
