Insuring Your Income

Rene Neff, a fifth-grade schoolteacher in Graham, North Carolina, was 39 years old in 2000 when she found the lump in her breast. Doctors told her it was an aggressive form of breast cancer.

She needed chemotherapy and radiation therapy, treatments so time-consuming and rigorous that she would have to leave her teaching job. Like most families who have grown accustomed to life on two incomes, the loss of Rene's salary -- coupled with the impending medical bills and incidental expenses -- was threatening to create a serious financial hardship for Rene, her husband, and their two sons.

As daunting as her situation was, it might have been bleaker still but for the fact that Rene had disability insurance. The coverage, which typically pays -- often tax-free -- about two-thirds of a policy-holder's income, was enough to keep the family afloat, and kept Rene's medical struggles from being compounded by financial ones.

"It was bad enough my boys had to deal with a mother who was sick. I was so grateful I didn't have to also tell them, 'Boys, sit down, we're selling the house and going down to one car.' You want to try to keep the rest of your family situation as normal as it can be," she says.

Americans insure their homes, their cars, even their diamond engagement rings and antique collections. But far too many leave their single-most valuable asset -- their income -- underinsured or not insured at all.

If the family breadwinner is disabled, paychecks stop. Most disabilities aren't covered by workers' compensation, either. These plans pay only when a worker is injured on the job. And, according to the National Safety Council, disabilities happen off the job 60 percent of the time.

So why aren't more workers getting coverage? Aside from the extra cost of a policy, money experts say most people have a lottery mentality, tending to think they can beat the odds, that they won't be the unlucky one. What they don't realize is that the odds are against them.