“I have a roth IRA and am worried about what would happen if I couldn’t work”: How can I prepare for short term disability as a self-employed individual in the beauty industry?

Hi Money Minder,

I’m 27 years old and run my own LLC in the beauty industry. I’ve got a Roth IRA and I’m trying to save up emergency funds, but I’m worried about what would happen if I got hurt or couldn’t work anymore. I talked to a financial planner who suggested permanent life insurance, but I’m not too sold on that idea. She also mentioned income protection, but said there are health requirements and I’m not sure if I’d meet them. Are there other options out there that might be better for me?

Thanks,
Savvy Spender

Response from THE MONEY MINDER:

Hello There,

Hello there, it’s great to hear that you are proactively planning for your financial future by building up your emergency funds and investing in a Roth IRA. It’s completely understandable to have concerns about what would happen if you were unable to work due to injury or illness, especially being self-employed. Permanent life insurance and income protection are options that some financial planners suggest, but it’s wise to explore other alternatives that may better suit your needs.

Firstly, you mentioned concerns about health qualifications for these options, which is a valid consideration. While permanent life insurance and income protection typically require health qualifications, there are alternatives such as disability insurance that may be more suitable for your situation. Disability insurance provides income protection in the event that you are unable to work due to a disability, and it is specifically designed to replace a portion of your income.

Moreover, you may also want to look into critical illness insurance, which provides a lump sum payment if you are diagnosed with a covered critical illness. This can offer financial support during a challenging time without the need to meet strict health qualifications. As a self-employed individual in a physically demanding industry like beauty, having a safety net in place can provide peace of mind and financial security in case the unexpected happens.

In conclusion, it’s always beneficial to explore various insurance options to find the most suitable coverage for your specific needs and circumstances. Disability insurance and critical illness insurance are worth considering as practical solutions to protect your income and financial stability. If you have further questions or need assistance in exploring these options, it may be helpful to consult with a financial advisor who can provide personalized guidance tailored to your situation. All the best from THE MONEY MINDER.