When it comes to insurance, we all know the basics: Auto insurance? Mandatory. Homeowners insurance? Of course. But what about the often-overlooked contenders: Life insurance and disability income insurance? Most people have heard of life insurance, but fewer are familiar with its equally important cousin, disability income insurance (also known as income protection insurance). Depending on where you are in life, disability income insurance might just be the unsung hero you didn’t know you needed.

Disability Income Insurance: The Early Career Game Changer

If you’re in your 20s or 30s, you might think you’re invincible, but the stats tell a different story. Did you know that 1 in 4 people in their 20s will experience a long-term disability lasting more than 90 days? The odds of being sidelined by a disability are three times higher than those of passing away early.

Here’s why that matters: If you are single, you rely on your income. Imagine trying to cover your rent/mortgage, utilities, groceries, and those fun weekend outings without your paycheck. Losing your ability to work due to injury or illness can turn your financial world upside down fast. While life insurance pays out only if you die, disability income insurance steps in when you’re still very much alive—but unable to earn a living.

In other words, in your early career years, disability income insurance is like that safety net that catches you when you least expect it.

Life Insurance: The Family Security Blanket for Later Years

As you get older, life tends to be more complicated—and more expensive. Maybe you’ve picked up a mortgage, a spouse, and some children along the way. Suddenly, it’s not just your financial future you’re worried about, but your family’s too.

Enter life insurance, the security blanket that ensures your loved ones will be taken care of if the unthinkable happens. But here’s the kicker: While life insurance is designed to take care of your family after you’re gone, don’t forget about what keeps the ship afloat in the first place—your income! If you’re unable to work due to a disability, it could be a long-term financial disaster for you and your family.

That’s where disability income insurance shines again. It helps ensure that even if your paycheck stops, the bills will still get paid. A side note: Life insurance policies can carry a disability premium waiver benefit that pays your premium if you are disabled. That’s a great help too.

The Final Word: Why Both Insurances Matter

While life insurance is single handedly the largest income tax-free asset, one can create, disability income insurance is the “Valuable Player” for your working years. It protects your ability to keep meeting your financial obligations, even if you’re temporarily benched from the workforce.

So, which is more important? The answer depends on your life stage, but one thing’s for certain: Don’t underestimate the power of disability income insurance protection—it’s the financial armor you will want before life insurance takes center stage.