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Financial planning tips for single parents

Tip No. 8: Get disability insurance
Tip No. 8: Get disability insurance © Steven Frame/Shutterstock.com

"Your income is your most important asset," Morrill says. "Have you insured your most important asset?" That's what disability insurance does -- and it can be especially crucial for single parents who don't have a second income from a spouse to help cover the gap.

Morrill recommends that you check with your employer to see whether it offers the benefit. Generally you will get a reduced income amount when you claim disability -- between 50 percent and 70 percent of your salary.

Disability policies come in two durations -- short-term and long-term -- depending on whether the disability will last weeks or months versus years. "If you have to choose, go with short-term," says Morrill. "Most disabilities are short-term, not lifelong."

When you buy a disability policy, the premium is usually fixed, and the younger you are when you purchase the policy, the lower that monthly premium is likely to be. You might want an "own occupation rider,” which means the disability insurance will pay out if you can't perform your own occupation, even if you can perform other jobs.

"Social Security disability payments may also offset the payment you receive from a disability policy," Morrill points out.

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