Of late, I’ve been thinking quite a bit on what I’d do if the following scenario were to happen.

Suppose your ability to earn a regular income is hampered because you suffer a disability due to whatever reason (say due to an accident). How would you plan ahead and financially mitigate for this scenario? Remember, the younger you are the longer is the time frame that you’d need to plan for.

My thoughts.

• The best solution for such a scenario would be long-term disability insurance — insurance that, should you become disabled, replaces your income to a certain extent each month for a significant length of time. I’ve seen only one such disability insurance policy on offer in India: Tata AIG’s Secured Future Plan. As I’ve written before, the insurance payout scenario is excellent: at the highest level you get Rs 35,000 per month guaranteed for 20 years. I’m yet to go through the policy wording.

• The other option is to opt for a regular personal accident plan which pays out a lumpsum in the event of a disability. The onus would then be on you to manage this money such that it can generate a steady income stream. I did peruse few such plans but the payout scenarios were quite complex.

What would you recommend? Are there other options that I could look at? And how have you planned for this scenario?