Planning for the unthinkable

What are your big financial goals? Most people are saving for something. Whether it’s retirement, college, a cabin or something else, the key component to achieving your goal is your income.

And what’s your plan to ensure your income continues if you (or your partner) become ill or die prematurely?

Injury or illness

Recent statistics show that one in four people will not be able to work due to a disability at some point in their career. And the average disability lasts 34 months. To make matters worse, half of working adults couldn’t make it a month before financial difficulties set in. 

Most of the time, dealing with a disability is only temporary. But the financial burden that comes with not being able to work for a period of time can be detrimental in the long term.

It may be a matter of putting bigger financial goals on the backburner, or it could be a challenge to pay for your mortgage, car and household expenses. 

It’s important to have a plan in place so that you’re financially secure in the event you’re unable to work due to a health issue. 

I help people plan for life issues like these all the time. Here are a couple of common responses I hear and some important questions you should consider in order to gauge your fiscal preparedness and risk comfort level:

“I have disability coverage through my work benefits.”

  • Does my coverage fit my personal needs? 
  • How long does my coverage last? 
  • Is the money I receive subject to income tax?
  • Am I still covered if I’m laid off or temporarily unemployed?

“I’ll file for Social Security disability if I can’t work.”

  • How long can I go without receiving wages? A large percentage of social security disability claims are denied upon their first application. It can take months or longer to get approved. During that waiting period, you’ll have to pay your bills out of pocket.

Premature death

Your family likely counts on your income. If you die prematurely, your dependents will be left to shoulder the financial burden of your funeral costs, which average between $7,000 and $10,000, plus the cost of your lost future income and any debts. 

If you or your spouse passes away, will your spouse and children be able to continue to live where they do, participate in the activities they enjoy and adequately save for college? 

Even if you’re a stay-at-home parent, you’re bringing value to the household — $25,000 to $75,000 annually according to some estimates — which would be lost in the event of your passing. 

This financial risk can be eliminated by having the right plan in place. Having life insurance that’s tailored to your financial needs can help you make sure your family is taken care of under trying circumstances. 

Most people would like to be able to pay off any debt and have their partner’s income replaced until their children are out of the house. The amount of coverage you need is pretty easy to calculate. There are many different resources available to figure out a plan that’s right for you and how much the premium might cost. 

Premiums are based on age and your current health, so the earlier in you address it, the less expensive it may be.

A first step

There is no one-size-fits-all solution for this kind of life planning. is a resource that’s backed by insurance professionals and designed to get consumers started on planning. It includes a life insurance needs calculator and tips for assessing your situation. 

Ultimately, consulting with your life and health insurance providers can help you put a plan in place to give you the peace of mind of knowing you’re prepared for whatever life throws at you. 

Bob Lawrence is a State Farm agent in St. Paul working with clients in Minnesota and Wisconsin. He is the proud papa of two teenagers. Learn more at