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CNBC's Sharon Epperson: Here's how I avoided financial disaster in my moment of medical disability

  • Suddenly stricken with a brain aneurysm in 2016, CNBC's Sharon Epperson explains how key preparations helped her avert a financial catastrophe.
  • Emergency savings, disability insurance and a power of attorney are just some of the things you need to keep your affairs in order.

A year ago, my life changed dramatically. It took a traumatic event — a brain aneurysm to be exact — for me to truly understand how important it is to be financially prepared for the unexpected.

A brain aneurysm is a bulge in an artery in the brain, and can appear with no symptoms. When it bursts, like mine did, it's often fatal. Without warning, I was suddenly disabled, uncertain of whether or when I could ever be able to return to my career (I resumed my position at CNBC at the end of September.)

In my reporting on personal finance, I often tell readers and viewers that it is vital to have a financial plan. Now I know first-hand that advice can be life-saving, especially when an unexpected disaster changes your life.

The most important lesson I learned: Bring your loved ones up to speed on your financial life while you are well, in case you are unable to do so if you're hit with a medical emergency or become disabled.

Thankfully, my husband and I had planned ahead, and you can, too. Here are five steps we took to avoid a financial disaster if one of us was ever hit with a medical emergency.

Sharon Epperson
David A. Grogan | CNBC

Enroll in a comprehensive health insurance plan

Get employer-based medical insurance if your job offers it. If you are a freelancer, contractor or self-employed, you can get health coverage through the individual health insurance marketplace. Also, make sure to contact an independent health insurance agent to explore your options.

"If you don't have a comprehensive health plan that covers basically everything, you can have complications after a medical emergency that can put you into bankruptcy," said Carolyn McClanahan, a physician, financial advisor and founder of Life Planning Partners in Jacksonville, Florida.

If your household income is no more than 400 percent of the federal poverty line, you should qualify for tax credits through the Affordable Care Act. An independent health insurance agent can walk you through the process.

Set aside ample emergency savings

Many financial advisors suggest you have a "rainy day" fund to cover at least three to six months' worth of living expenses. Yet a medical emergency can feel more like a hurricane.

Having a larger stash of cash can save the day if there are mounting health care expenses. Still, building that emergency fund takes time, so start small.

Living within your means is essential, and you may find you have to cut some discretionary spending in order to save. Try putting aside 5 percent to 10 percent of your pay each month into a money market or savings account. Set a goal of saving enough money to cover at least one month of living expenses, then gradually work your way up.

Get disability insurance

Disability insurance payments will provide steady income when your pay check stops, or if you are too ill or injured to work.

"Your earning capability is even more important than the earning capability of your investment portfolio. So the least you can do is to insure your earnings," said New York-based financial advisor Stacy Francis, CEO of Francis Financial and founder of Savvy Ladies, a nonprofit personal finance education and resource organization.

"If you don't have a comprehensive health plan ... you can have complications after a medical emergency that can put you into bankruptcy." -Carolyn McClanahan, physician, advisor and founder of Life Planning Partners

Group disability policies offered by employers typically cover 40 percent to 60 percent of your salary, while some companies offer supplemental disability coverage that is usually much cheaper than if you bought it on your own.

While companies often pay for the disability policy, employees may have the option to pay premiums themselves through payroll deduction. If you do that, the benefit will be tax-free when you use it.

However, self-employed people who do not have disability insurance say private policies are too expensive. Talk to a financial advisor or independent insurance agent to find ways to make it more affordable. Francis said consider extending the "elimination period" of the disability policy to six months, for example, before the policy kicks in to bring down the cost of premiums.

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Figure out who will make key financial and health-care decisions

An estate plan with prepared legal documents that identify who will do what will make critical decision-making a lot easier. These key roles will need to be filled:

  • A health care power of attorney to step in and make decisions ranging from emergency to ongoing medical care when you can't make them for yourself;
  • A durable power of attorney to make financial decisions, including making sure bills are paid, and
  • A guardian to care for minor children and help them manage day-to-day activities.

If you haven't done your estate plan yet, at least have the conversation with your loved ones about whom you would want to take over these important duties, if you are no longer able to do so.

Put your finances on autopilot, and clue in your designated power of attorney

  • Sign up for direct deposit at work. This way while you are on sick leave and/or disability, your paychecks, as well as disability payments that are made through the payroll department, will automatically go into your bank account.
  • Use automatic bill pay for essential household expenses, such as rent or mortgage payments, utilities and phone.
  • Set up online or mobile banking, and keep your password in a safe place.

However, don't keep all of this information to yourself. "Periodically share the 'big picture' of your finances with the person who would take over in the event of an emergency. Keep an updated spreadsheet with details of assets, liabilities and bills to be paid," McClanahan said.

"On the Money" airs on CNBC Saturdays at 5:30 a.m. ET, or check listings for air times in local markets.