The following is a guest post from FMF at Free Money Finance. If you’d like daily tips, thoughts, and suggestions on how to grow your net worth, subscribe to Free Money Finance for free by clicking this link.

For most people, their career is their most valuable financial asset. Nothing else they own is likely worth as much (several million dollars over a lifetime). And even if they do have something more valuable (like an investment portfolio), it was probably earned as a result of their career.

As with anything valuable, you need to take steps to protect your career. That’s why financial websites recommend life, health, and disability insurance — to protect/replace the value of your career in case you die, get sick, or are physically unable to work. Having some of these insurances is wise for almost every worker. But there’s another form of insurance that’s equally essential.

This insurance is free — but it takes some work and planning. Its benefits go far beyond the time it takes to implement the steps involved. And in addition to increased income, this insurance may even give you more job satisfaction, less stress, and a longer life. Interested?

I’ll call it “Career Insurance”. Career Insurance isn’t a product you can buy, but a series of steps you can take to minimize the chance that your career will suffer a major catastrophe.

The benefits of career insurance
Career Insurance can help you avoid the following situations:

  • Being fired or laid off. When you lose your job, you don’t just lose your income, but your career progress is halted. You lose valuable time, which limits the compounding growth of your earnings. Plus, when you consider that many people have to take a step back in their careers when they finally do find a new position, you realize just how bad a firing or layoff can be.
  • Long layoff time. Even if you take steps to avoid firing or layoffs, it can still happen. If you’re let go, you must focus on minimizing the time that your career is in limbo. The longer you’re laid off, the longer your most valuable asset stagnates and the more likely you are to take a job that’s far below your previous level.
  • Financial strain. This step doesn’t protect your career per se, but it minimizes the pain associated with losing a job. You’ll have less stress, more energy, and extra time to focus on finding new work.
  • Physically unable to work. No work equals no pay. There are things you can do to prevent illness and injury, as well as things you shouldn’t do to maintain good health.

Let’s take a closer look at how you can protect yourself from these hazards by developing your own Career Insurance.

How to protect yourself from being fired or laid off
Make yourself valuable inside the company to protect against layouffsMake yourself more valuable/indispensable to your employer. Let’s face it, even in the worst environment imaginable, the ones who keep the ship afloat are the last ones fired from the crew. So deliver more than what’s expected for your position (and more than most or all others in your organization/department).

In particular, if you can contribute to the organization’s bottom line on a regular basis by saving it money and/or growing revenue, you’re usually untouchable. Oh, and don’t forget to be likable as well. Yes, jerks who produce are still kept on staff, but they’re fired before productive nice guys!

Find a mentor. Having someone above you in the organization who can guide and direct you has many benefits. A mentor can help propel your career by making you more effective, help you accomplish more, and pave the way for promotions and raises. All of these are great reasons for having a mentor. But there are other benefits — Career Insurance benefits.

A mentor can watch your back when firings and layoffs occur. He may put in a good report for you in key meetings. At the least, he might be able to give you advanced warnings as to when layoffs could be coming, so you can get a jump on finding a new job.

Network inside the company. In addition to having a mentor, you should develop good contacts throughout the company at various levels. Again, these can help protect you in troubled times.

Once when my company was facing layoffs, I had another executive speak up on behalf of one of my employees because she had also worked with his department on a key project. In the end, his defense helped sway committee decisions and she was able to keep her job. You never know how or when someone can help you, but the more people you have looking our for your best interests, the better off you are.

How to minimize layoff time
Network to develop contacts outside your company. Networking is a key way to grow your career. One major benefit: It connects you with people who can assist you in finding new work. Statistics show that a majority of jobs are placed by networking, so the bigger your network, the better chance that you can use it to find a suitable job quickly.

Work to broaden your contacts through lunch dates, seminars, trade shows, industry events, volunteer activities, social media, common interests, and more. And of course, a network doesn’t only work when you are out of work. It’s helpful when you’re employed and want to make a change too.

Refresh your resumé. You should keep track of your work accomplishments on a regular basis — it’s part of a systematic way to get raises and promotions — so you’ll always have a handy list of what you’ve done and how you’ve performed. (By the way, having a system will make sure you don’t forget anything major.) These will allow you to develop an updated resumé immediately if you’re let go. Your list will also allow you to be sure your resumé is full of high-end accomplishments. Update your resumé as quickly as possible, and get it out to your network pronto.

Get an employment contract. While this won’t get you a job faster, it will basically extend your current income for a period of time. The ultimate in protection, an employment contract is usually held by top-level executives and other key personnel. But if you can obtain this status, you know that even if you’re let go, your company will have to pay your salary for the stipulated amount of time — usually six months or a year — even if they fire you. Usually this is more than enough time to find new employment without disrupting your career.

How to minimize financial strain
Develop outside streams of income. If you get fired, one way to cushion the blow is to have income from other sources. It might not provide the level of earnings you’re used to, but some money coming in is certainly better than no money coming in.

Suggestions to bring in more money:

  • Explore money-making hobbies
  • Start your own business on weekends or evenings (I like to referee soccer matches)
  • Work on growing your investments (if you have savings/investments they can sometimes be reallocated to produce income)

Consider all the ways that you might be able to earn more money, select one or two that work for you, and start now in getting them developed. Even if you never need them in case of a job loss, the extra income will still come in handy.

Increase the amount in your emergency fund. A primary reason for having an emergency fund is to provide for your needs in case you lose your job. And the less stable your job situation (or the more likely a layoff could be coming), the more you need in an emergency fund. Almost everyone should have at least six months of living expenses saved up in case of a loss in income. If you’re in an uncertain industry, company, or position, work now to bump that up to give yourself protection commensurate with your risk.

How to protect yourself from physical disability
Disability Insurance. Yes, this is a traditional insurance product, so maybe it shouldn’t be part of this article. But it’s also probably the most ignored insurance product on the market — and yet it protects your largest asset. Regular exercise can help prevent on-the-job injuriesYou must get some sort of disability insurance coverage. Sometimes this will be provided through your employer, but many times the level of coverage is not adequate. Make sure any disability policy you have will replace at least 60% of your income and will kick in before your emergency fund runs dry.

Keep/get in good shape. If your body isn’t functioning fully, you can’t work to your full potential (which isn’t good for your job security.) So follow mom’s suggestions: Eat properly, get plenty of rest, exercise, drink water, and keep stress as low as possible. (And don’t forget that J.D. is co-author of a fitness blog!)

Take precautions against sickness. If you’re sick, you can’t work. If you can’t work, you won’t get paid. At a minimum, being sick will cost you valuable vacation time. And feeling poorly always negatively impacts your performance. So follow mom’s other set of instructions: Wash your hands (especially during cold and flu season), take action at the first signs of sickness (drink fluids and get plenty of rest), seek medical help when needed, and “don’t smoke, drink, or chew or hang with those that do”. By taking care of your body, you’ll not only be a better employee, you could also get the added benefit of prolonging your life.

A word of warning
Of course, no Career Insurance plan will work 100% of the time. Despite all of these precautions, the perfect storm could occur and sidetrack your career a bit. But Career Insurance will certainly help you weather the storm, minimize any damage, and ultimately move your career along. So get started today developing your own Career Insurance and ensure that your most valuable financial asset is protected the way it should be.

Over the years, FMF has provided several guest posts at Get Rich Slowly, including the awesome Five Steps to Six Figures in Seven Years (from last October 15th) and the controversial Why Religion is an Important Part of Personal Finance.

This article is about Career, Insurance