If you think only ghosts can come back to haunt you and your family, think again. Some poor decisions, or even inaction, can become a thing nightmares are made of.  Many people either fail to think about or purposely decide not to get Disability Insurance.  As a financial advisor, I'm here to tell you that might be a scary decision indeed.

What is Disability Insurance?

Disability insurance provides a stream of income to you (and your family) if you are unable to work due to an accident or illness. Since your earning power is one of your greatest financial assets, it is important to protect that asset and minimize the impact of losing it. According to Statistics Canada, in 2012, 13.7% of Canadians aged 15 and older reported being limited in their daily activities as a result of a disability.  The unexpected occurrence of illness or inability to work due to disability can be financially traumatic.

A list of horrors:

• Managing Debt / Mortgage
  Becoming disabled can be particularly complicated if you have debt such as a mortgage. While you may be able to take care of your day-to-day expenses using your savings, your debt obligations will inevitably become more stressful, particularly if you can no longer make your mortgage payments. In addition, real estate is an illiquid asset, meaning it's difficult to sell off since it depends heavily on the current market. A sudden change in housing, of course, would impact your family greatly, in addition to coping with this difficult time. 

• Supporting Dependents
  If you have a family that relies on you for financial support, such as children, a spouse, or elderly parents, your ability to work becomes that much more important. Disability insurance will help to make sure that those you love most are taken care of.

• Medical Expenses
  Depending on your disability, you may incur additional medical expenses such as physiotherapy, drugs, massage therapy, or necessary medical devices. Even having to make renovations to manage mobility issues can be costly. 
   
• Lifestyle Change
  Not only will disability impact your lifestyle and way of life, consider how the loss of income would impact your ability to afford your current lifestyle. Perhaps you will need to cut out a lot of the things you have or love to do. Entertainment or eating out, kids activities, cars, vacations, or other such discretionary purchases. Especially if the disability is long-term, this can be life-changing not  only on how you live but how you spend. 

Conclusion

Disability insurance is a core piece in the "Risk Management" of a Financial Plan. Go get it, protect yourself, and ward off any unpleasant financial disturbances in your time of need.