Playing it safe: Lucinda Andrew finds comfort in knowing she's fully insured.

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THE WORST TIME TO DISCOVER THAT you need supplemental insurance is after it's too late.

Five years ago, when Lucinda Andrew's father, Raymond, was diagnosed with Alzheimer's disease, her sister and three brothers began holding family talks about options for his long-term care. 'We all wanted him to stay at home," says the 37-year-old Dallas litigator, whose father lived alone in Fort Worth. "But as his health began to decline, he needed round-the-clock professional care."

The siblings felt that they had three options: an Alzheimer's facility, assisted living, or a nursing home. But they soon found that the best homes accepted only private insurance or cash, and the cost ranged from $3,000 to $6,000 a month. Her father, a retired Army veteran and postal employee, had Medicare and a pension that "didn't even cover the least expensive" option. Andrew, who, along with her brothers and sister, agreed to contribute to her father's care, canvassed locations in person and on the Internet for two years. "This is my dad we're talking about. We couldn't just put him anywhere." In June her father died at home of kidney failure. He was 84.

The struggle to find a good facility that accepted Medicare opened Andrew's eyes to her own coverage needs. "After going through everything with my dad, I decided to take advantage of the long-term care insurance offered through my employer."

It's not the first time Andrew has invested in supplemental insurance--policies that augment major medical and life insurance coverage. In 2001, when she was hired as an associate by the international law firm Jones Day, she enrolled in the disability insurance policies offered by her firm. If she were to become disabled and unable to work, the insurance would provide a portion of her annual income so that she wouldn't face a financial crisis if she stopped collecting a paycheck.

Before meeting with her employer's human resources department, Andrew did her homework and learned that the firm's standard disability policy provides 26 weeks of short-term disability, and she doesn't have to pay a premium. If necessary, Andrew would be paid full salary for the first 13 weeks and 75% thereafter. That's excellent coverage, considering that most insurers don't provide 100% of salary because they want to give employees an incentive to return to work. Playing it safe, she didn't stop there. She asked herself: What if I can't work for a year or more?

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Currently earning a base salary of $160,000, Andrew says her monthly expenses average $4,000. They include a 10-year mortgage payment of $1,800; a credit card payment of $1,000; and a student loan bill of $600. She lives well within her means but also knows how unpredictable life can be. According to the Northwestern Mutual Life Insurance Co., a year of disability can wipe out 10 years of savings. Andrew signed up to augment the short-term policy with a long-term policy--paying a premium of $47 a month, or $564 annually--that would enable her to receive 60% of her salary every year until she's 65.

When her father got sick, Andrew took out a long-term supplemental disability plan. The premiums of $55 a month, or $660 annually, entitle her to a payout of $2,000 a month if the policy is invoked. This would supplement the 60% of her income she'd already be receiving from the other policy.

This policy can be converted to long-term coverage. In that case the long-term care insurance would pay $3,000 a month for nursing home, assisted living, or in-home care--up to a cap of $216,000. According to Andrew, a good nursing facility in Dallas now costs about $5,000 a month--an amount likely to increase exponentially by the time she may need one.

One of the best ways to lower the cost of coverage is to rely on your own resources for as long as possible. Long-term disability payments can kick in as early as 60 days to as late as 12 months after an accident. The length of time between the onset of a disability and eligibility for benefits is called the elimination period; the longer the elimination period, the lower the premium. Because she has an emergency fund of $36,000, Andrew can delay collecting benefits for as long as six months.

"As my family status changes, I will look into seeing if I need more coverage," says Andrew. Though such policies are usually purchased by those with a spouse or dependents, Andrew, who is single, is safeguarding family members who would be called upon were she to face an emergency. She made a wise decision not to wait to get coverage, and because of that she exemplifies BLACK ENTERPRISE'S Declaration of Financial Empowerment principle No. 6: I will preserve and protect my assets through proper financial and insurance planning.

Declaration Financial Empowerment

From this day forward, I declare my vigilant and lifelong commitment to financial empowerment and hereby pledge the following:

1 I will use homeownership as a foundation for building wealth.

2 I will be proactive in managing my budget, credit, debt, and tax obligations.

3 I will maximize my earnings potential, live within my means, and commit to saving and investing at least 10% of my income.

4 I will ensure that my investments are properly diversified and correspond to my current financial goals.

5 I will immediately commit to a program of retirement planning and investing.

6 I will preserve and protect my assets through proper financial and insurance planning.

7 I will ensure that my children receive a thorough education on financial and business matters.

8 I will ensure that my wealth is passed on to future generations through proper estate planning.

9 I will actively support the creation and growth of viable, competitive black-owned enterprises.

10 I will use a portion of my wealth to strengthen my community.

Andrew's Advice:

Look into the crystal ball. Andrew learned the importance of long-term care insurance the hard way, "When I may need toga to a nursing home, the cost will likely have quadrupled." She knows that she may need help paying for one. The National Committee for Quality Assurance Website, www.ncqa.org, provides guidance on finding a health plan.

Take time to read. Read The Financial Peace Planner by Dave Ramsey (Penguin; $16). It explains how the right insurance policy is an investment in one's financial security. "The book does more than provide practical advice about how to build and maintain wealth; it also emphasizes the importance of charitable giving and leaving a legacy. Those were important to me."

Don't rush. Disability insurance can be complicated. The policies are wordy. But you're better off doing the math now to make sure you're covered rather than wishing you had after it's too late. Evaluate your needs using an online calculator on the Website of the Life and Health Insurance Foundation for Education; www.life-line.org.

Spread the word. Make sure that everyone in your family knows where to find your insurance papers. If something were to happen, the last thing you want is for them to start a blind search.

Shop around. If your employer does not offer disability insurance or long-term care coverage, shop around. Sites such as Insure.com or QuickQuote.com are good pricing sources to take to an insurance broker.