Financial disaster can kill you. Here's how to protect yourself

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A loss of wealth can increase an older person's chances of dying. A new study published in the Journal of American Medical Association tracked 8,714 people aged 51 to 61 for 20 years and found those who experienced a "negative wealth shock" had a significantly higher risk of death.

The study authors defined a negative wealth shock as a loss of 75% of a household's net worth over two years. Of the people the study tracked, 2,430 experienced such a shock. Those who experienced a shock had a 50% higher mortality rate than those who did not.

Why money problems are deadly

A loss of financial resources can lead to less spending on health, which can have long-term consequences, including increased mortality, the study said. A negative wealth shock can also lead to mental illness and substance abuse.

Other research has found links between health and financial wellness. A study published in February in American Economic Review found hospital admissions were linked to a lower probability of being employed and a drop in earnings.

So how can you protect yourself from a financial shock and its potentially deadly consequences?

1. Make an emergency fund

It's a good idea to have three to six months of income saved in case of a financial shock. Only 48% of Americans say they have an emergency fund that would cover three months of expenses, according to a Federal Reserve report. If you haven't started such a fund, adjust your direct deposit to automatically draw part of your paycheck into a savings account. Make sure you can't access the account unless it's a true emergency. Here's a trick: Open a high-yield savings account online with a bank you don't currently use.

2. Leverage your health plan

Health and wealth can be part of a vicious cycle. A health scare is sometimes costly. The stress of paying a big medical bill can lead to more health problems, as the JAMA study shows. Having health insurance can help. Former president Barack Obama's health law requires insurance plans to cover preventive health services like blood pressure screenings and routine immunizations at no cost. It also requires plans to cover mental health services, so, if you think you have a serious condition like depression or substance abuse, seek treatment.

Identify the out-of-pocket expenses associated with your health insurance, including your premium, co-pay and deductible, and take advantage of all the benefits your plan offers to prevent and treat costly medical conditions.

3. Consider disability insurance

Health insurance may not be enough to insulate your finances. Even people with coverage can experience a decline in earnings after a medical emergency. Disability insurance protects income in the event of illness or injury. However, employers generally don't offer comprehensive coverage, public options are difficult to qualify for and individual insurance can be confusing and expensive. That doesn't mean you can't find an affordable policy. We have a guide for doing just that here.

If you or anyone you know is experiencing suicidal thoughts please call the National Suicide Hotline at 1-800-273-8255 or contact them online.

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