Protect Your Future Income With Disability Insurance

And it's not safe to count on Social Security covering you in the event that you become disabled and can't work. Social Security provides disability benefits only if you're unable to work for a year or more and can't perform any job whatsoever. It's also really common for disability claims for Social Security to be denied.

If you're unable to work for a short period due to a disability, you can use your emergency fund to pay the bills. But if you're out of commission for a longer period of time, disability insurance becomes vital.

How to Pick the Right Coverage

So here are a few tips on how to choose disability insurance that's right for you:

First, find out if your employer offers disability insurance. You may discover that you're already covered or can get the insurance at an affordable group rate. If your employer doesn't offer disability coverage or if you're self-employed, find out if any professional associations you belong to offer the coverage.

Second, if you're given a choice of long-term or short-term disability coverage, go for long-term coverage. You're much better equipped to deal with a short period without your income than a long one. Also, if you don't already have an emergency fund equal to three-to-six months' worth of living expenses, now's the time to start saving one up.