This article is an excerpt from the Shortform book guide to "The Wealthy Barber" by David Chilton. Shortform has the world's best summaries and analyses of books you should be reading.
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What would happen to your income if you got sick or disabled? Is your employer’s health and disability insurance policy adequate?
If you’re sick or injured, you can’t work. You need a plan for such circumstances. Protecting yourself financially is a vital element of having a sound financial plan. In The Wealthy Barber, David Chilton discusses health and disability insurance in this context.
Keep reading for more information on this kind of financial protection and why you need it.
Make Sure You Have Sufficient Health and Disability Insurance
Chilton advises that you make sure you have sufficient health and disability insurance. He says most employer group disability policies are inadequate, so you’ll probably need an individual policy.
Although many people don’t think they’ll ever need disability insurance, statistics show that a 30-year-old’s chances of becoming disabled for a one-year period or more at some point in their life are one in four. Disability insurance is a way to ensure your greatest asset—your earning power.
(Shortform note: When it comes to choosing disability insurance, you can select a short-term policy, which pays out for a few months to a year, or a long-term policy, which pays out for as long as the disability lasts. In addition, some disability policies define disability as “own occupation” and others define it as “any occupation.” The former provides coverage if you are unable to perform the occupation you were trained for, and the latter provides coverage only if you are unable to perform any reasonably suitable occupation.)
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Like what you just read? Read the rest of the world's best book summary and analysis of David Chilton's "The Wealthy Barber" at Shortform .
Here's what you'll find in our full The Wealthy Barber summary :
- A guide to becoming financially successful by following simple principles
- Why you might not need to buy life insurance
- Why you should only buy a house if it’s right for you
