I consider myself a prepper – not a crazy doomsday type of prepper, but an every day, make sure my family is taken care of kinda prepper. If you’re reading this, you probably consider yourself somewhat of a prepper. Oftentimes, we have extra food in the basement, cases of water stashed away, maybe even some 55-gallon barrels of water, medical supplies, extra cleaning supplies, seeds, and garden.
We do that because we want to take care of emergencies that can crop up. Loss of a job – between our emergency stash and our emergency fund, we’ve got that (at least partially) covered. We also understand the fact that we need to be financially prepared in various ways. And then, many of us understand our need for an emergency fund of up to 3-6 months living expenses. And while all of this is true, have you considered that insurance is also an important part of preparedness?
Disability Insurance
So let’s say that Saturday you or your spouse are out running an errand. You’re getting ready to turn left onto a street. You check both directions, and everything is clear, so you start to pull out. Then, out of nowhere, a vehicle comes careening through the intersection and t-bones your car. Ambulances are called. Surgeries are scheduled. The prognosis is good that you or your spouse is going to make a full recovery, but going to work isn’t an option for four to six months while your body takes time to recover.
What does your family do to replace the income that’s not coming in? How are you going to live and pay the bills? Unless you know someone who has been impacted by a disability, it may not even be on your radar. In this case, however, disability insurance is the answer.
One of my favorite family entertainment couples is called Kristen and Danny. They do funny lip-sync videos and speak on creating strong families and marriages. Last fall, all of a sudden, Danny started losing his gross motor skills and then it moved to fine motor skills.
It got to the point that Danny couldn’t even use a computer to edit their videos (which at one point was a weekly occurrence). Have you ever considered that a disability, short-term or long-term, could strike your family?
There are two types of disability insurance – Short-Term Disability and Long-Term Disability insurance.
Short-term disability Insurance
The first thing you need to know about short-term disability insurance is that it will only pay a portion of your salary. If you get paid a base pay plus commission, short-term disability will pay a portion of the base pay. It will not indemnify your commission. The percentage will vary from policy to policy and usually falls somewhere between 40-80% of your base pay.
There is another important bit about short-term disability of which you need to be aware. Short-term disability doesn’t always start to pay on day 1 of a disability. Oftentimes it starts two weeks to a month from the time of the disability and then it does only last SHORT-TERM as the name describes – usually three months up to a year.
Long-term Disability Insurance
Long-term disability insurance is like its name sounds. It will pay out if you have a long-term disability. But because of that, it doesn’t usually start to kick in until after your short-term policy ends.
If you have it, it will kick in – depending on the policy – somewhere between three months to one year from the time of disability. This, like short-term disability insurance, is meant to replace a portion of the lost income for a specified time in the future – sometimes for the entire duration of your disability.
Important Lessons to learn when using disability insurance
Even if you have short-term or long-term disability insurance, the description of the policy should show you the importance of two things (1) The importance of living below your means and (2) How desperately important is having a significant emergency fund.
Life Insurance 
Even if we’ve not before considered disability insurance, most of us have considered life insurance. Since our lives are not about ourselves, but about those around us, life insurance is so important for those that we leave behind. We need to make sure that they are taken care of if anything were to happen to us. Even, again if you’re a stay-at-home-mom like me, and even if we don’t make money, it would take money to replace some of the functions that we perform. Nothing could ever replace the hugs, kisses, advice, walks, talks, and everything else that we do. Even in that case, we need to do what we can to make it easier on those who survive us, and life insurance is one of those things.
Dave Ramsey does suggest that you get enough life insurance to replace 10x your income. If you do this and invest the life insurance properly, you should have enough to live on. The way it works is this, if you invest $600,000 in a mutual fund that pays out 10% each year, you’ll have $60,000 each year to live off of without tapping into the principle. This way you don’t have to work to replace lost income. It’s all taken care of for you.
Homeowner’s Insurance
Oh, the importance of homeowner’s insurance. We can speak to that having, at one point, been hit by a tornado. We still had to fight to get things repaired – don’t think that just because you have insurance that things will be easy. It may be, but that’s not our experience.
Even with that being said, especially if you have a mortgage, but even if you don’t, unless you have the money to replace your house, you should have this insurance.
Some of the things to keep in mind – you need to check your policy in regards to
(1) Flood insurance
This isn’t standard on most policies. If there is even a remote chance that your house could get flooded, you should carry this rider on your policy.
(2) Mold
This is becoming more and more of a buzzword, but mold is a growing problem (no pun intended). It’s something that, especially with the increasing problem with mold in houses, you need to consider if you should look into your policy’s statement in regards to mold.
(3) Mine Insurance
Yes, believe it or not, it is a thing! Our current house was built in an area that used to be mined. We had to carry mine insurance on our house. A good insurance agent will walk you through these pitfalls, but you can’t always assume that you have a good insurance agent.
Renter’s Insurance 
Yep. Did you know that there is insurance you should carry even if you just rent? My sister rents an apartment and twice over the course of the winter it was inundated with water. This did cause some issues with wet furniture and even quilts which were ruined. It’s not the apartment complex’s responsibility to take care of this. It would be something to be taken care of by renter’s insurance.
Renter’s insurance also covers you in case of liability. If you cause an inadvertent fire, in most cases renter’s insurance will cover the damage done, not only to your belongings but to other people’s apartments.
Health Insurance
Everyone is going to have a health crisis at one point or another. Yes, there are different ways to take care of your health insurance needs – we have chosen to use Samaritan Ministries, which is health care sharing – not health insurance.
Samaritan’s Ministries is friendly to many natural modalities as well as traditional allopathic medicine. I appreciate it for many reasons. Whether you are using traditional health insurance or chose to do something like Samaritan Ministries, it is important to consider how you’ll manage a health crisis.
Car Insurance 
Besides being required by most states in order to drive, it’s so important, if for nothing else than to protect yourself. If something would happen and you would get into an accident, not only will your insurance cover the accident but, did you know that in many cases, it will also cover you if you get sued because of the accident. It covers property damage, so if you dodge a deer and run into a telephone pole or into a fence, it also covers stuff like that.
So What About You?
Do you carry each of these insurances? Are there any that you hadn’t considered before? Are there any that you are going to plan to check into? I’d love to hear your thoughts on this so we are all better prepared.
Together let’s Love, Learn, Practice, and Overcome
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If the SH the fan, will any of these insurance companies be around? Will there be agents to cover losses? Sounds to me like monies (if any currency is honored) spent to cover these expenses could better be uses elsewhere.
Hey RJ, Thanks for the comment. As a mama, my take on preparedness isn’t just TEOTWAWKI or SHTF. Sometimes we have personal SHTF situations. We lived through the Ferguson Riots. We’ve lived through a tornado. If we didn’t have homeowner’s insurance when we got hit by the tornado, we would have gone bankrupt. If we had gone bankrupt, we could have had our family of 7 out on the street. That would kinda be……..bad. So that’s the thought process behind the article.
RJ – I second Karen! You can’t just plan for the End of the World situations. The stuff that will affect most of us is the regular every day things – weather disasters, burst pipes, car accidents. I was on the board of directors for a life insurance company and I can assure folks that the rates are ridiculously affordable, even for adults. Probably no more than what you’d spend for Starbucks per year. Renter’s insurance only cost me $25/year! Compare that to the cost of having to replace everything in my apartment in a disaster. I’d say that’s money well spent. My sister doesn’t believe in insurance. She just got in a car accident that totaled her car. Medical bills are almost $1,000 – and she thankfully had no serious injuries and no passengers. She also wasn’t the at-fault driver which coul’dve made it all worse. She’s out her only car and has no way to pay those bills. Insurance would’ve taken care of all of it, but she, too thought her money would be better spent elsewhere. That’s penny wise, but pound foolish!
We used to have home owners insurance. Haven’t had it for a few years now. We haven’t had health insurance in over 20 years. Didn’t see the point, since we don’t go to doctors. Have never been healthier since giving them up! We have decided, rather than wasting money on something that may never get used (remember, you are gambling on a “if” situation and 9.9 times out of ten, the HOUSE wins), we buy $100 worth of silver every month. We set that aside. If ANY kind of emergency comes up, we would simply cash in enough silver to cover it. No need for 15 different types of insurance. We decided many years ago that insurance was a waste. Buy something tangible.
Debra, I do love the idea of putting $100 worth of silver aside each month! It’s a great idea, but if it can’t cover a catastrophic medical bill – what if you get an infection that hospitalizes you? That happened to me four years ago. Five days in the hospital was $30,000. Seriously! Each person needs to do what’s right for them, these are just thoughts for you to consider. Thanks for sharing your take on everything!
Do you have any idea how much all those various insurance policies will collectively cost you per year? Too much in my opinion. The homeowners policy on our retirement home was going to cost over $4000 a year!!! Life insurance for a couple of old retirees? Again, exhorbitant. I like the idea of having a nest egg of TANGIBLE ASSETS that could be tapped in ANY emergency.
Hey Debra, while I do completely understand where you are coming from, take context into consideration. For example, Do you have more than your house is worth or it would cost you to rebuild (which is usually the higher figure)in your savings and you wouldn’t panic if it were gone? Then AWESOME! If you aren’t in a financial position to do that, then you should have the insurance. If you’re retired and you have more than enough for a surviving spouse to live on, then excellent! Otherwise, I highly suggest you have the insurance.
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