Traumatic injuries can have a devastating effect on your life. They impair your ability to work, to enjoy leisure activities and in some cases, even to think if the injury is severe enough. If you’re concerned about having enough money should you become disabled due to an accident, then here are some factors you need to consider when you’re planning your finances related to such events.
What Kinds of Injuries Can Be Disabling?
A couple of different types of injuries can bring on disabilities. These include head or back injuries as a result of falling or some sort of crash, like an auto or work-related accident. These types of accidents can cause traumatic brain injuries. Traumatic brain injuries include concussions, skull fractures, brain contusions, and more. These types of injuries interfere with a person’s cognitive functioning and oftentimes, mobility. It’s additionally possible to get injured from overexertion, which pushes the body past its limits. A common example of this is an athlete who trains too hard and who either breaks a bone or even dies due to overworking the body.
Financial Cost of a Disability
The costs associated with disabling injuries can vary widely, due to the different types of injuries that a person sustains as well as other factors, such as how old the person was when he/ she was injured, current debt ratios and if other persons who might have been injured also. Think of it this way. If, when you were fourteen years old, you dived into a river, hit your head on a rock at the bottom of the river and broke your neck as a result, your injury will cost you more than if you have the same injury when you’re older. This is due to the number of years you’d be on disability.
The younger you are when you’re injured, the more years you have to live on disability, and therefore, the more money you’d need to sustain your life. The standard rule of thumb for injuries is to assume that you’ll need about 60 to 65 percent of your current income if you become injured. This number doesn’t include the costs associated with the medical treatment you may need as a result of your injury, which may cost as much as $600,000 or more if the injury is severe enough.
How to Prepare
When it comes to planning for the possibility of a traumatic injury, your standard household/ retirement budget won’t cover this expense, usually. You’ll need more financial support, and insurance is a good way to prepare. In other words, you need accident insurance. Your need for insurance increases, depending on the number of dependents you have, the amount of debt you carry and other life factors. The best way to determine the amount of insurance you’ll need is to visit with your financial advisor and your insurance agent to come up with the right amount of insurance for your needs.
Traumatic injuries severely impair your ability to work, which is an eventuality that all adults should plan for. Planning for it isn’t negative thinking. It’s smart. In the best-case scenarios, you’ll never need to follow through with your plans for this eventuality. In the worst-case scenario, you are in a traumatic accident with no plan in place for your care. It’s best to be prepared.
If you need help planning your finances, let us know and we can help you!