Most people have life insurance to protect their family if they were to die, but few have disability income insurance, which helps to cover the loss of income due to an inability to work. This insurance provides an income to the policyholder if she or he cannot work because of an injury or illness. The amount of coverage is usually limited to two-thirds of the individual's gross income to encourage the person to return to work. You will want to purchase a policy that is non-cancelable and will provide protection until you are 65. If you are single, this is the most important type of insurance you should have. It is critical if you are dependent on wages.

Be sure you understand how the term disability is defined. Costs are usually less if there is a longer waiting period before benefits start. Remember that disability payments may also be available from Social Security, which has strict definitions of disability for any occupation.

Consolidate and evaluate your insurance needs and coverage by completing the worksheets in this planning guide. Store the information with your important papers.