The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: moustache1979 on March 04, 2014, 12:00:41 PM
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Looking for advice on what types of "other" insurance programs are worthwhile. I have the option of choosing any/all of the below for work. Amounts and monthly cost are listed. In addition i have term life insurance that runs ~$40/month for $500k. I am mid-30's with a wife of the same age and 3 kids under age 6.
Critical Illness Core + Supplemental ($3,000 + $10,000) $13,000.00 $4.66
Basic Life Insurance $300,000.00 $21.24
Supplemental Life Insurance $430,000.00 $14.58
Supplemental AD&D $250,000 $4.50
Dependent AD&D $250,000 $4.50
Long Term Disability $86,000 $40.28
Long Term Care $9.28
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Depends on your 'stash, but I'd probably go for the long term disability only on that list. AD&D is just another way of dying really and you should keep enough life insurance for it, regardless of cause of death. LTC isn't worthwhile til your 50s/60s, especially an employer based plan, since it's quite unlikely you'd need to go to a nursing home directly from working (physical therapy/rehab should be covered by your health insurance, not LTC insurance).
If the $500k is enough life insurance for you, then that's fine. If not, buy a new policy outside your employer. Since if you become too sick to work and are terminal, you may lose your employer based policy, same problem as the LTC insurance.
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You should definitely consider Disability Insurance, more than one in four 20-year-olds today will be unable to work due to an illness or injury for 1 year or more during their life before retirement.
As a rule of thumb, you could expect to pay between 1-3% of your annual income for a high-quality disability insurance plan. The price could end up being more or less than 1-3%, but on average we strive to structure a policy that fits into this price range. To get an accurate estimation check out online calculators such as https://www.disabilityquotes.com/disability-insurance-quote (https://www.disabilityquotes.com/disability-insurance-quote) , its definitely better to be safe than sorry.
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LTD saved my sorry self. I can not recommend this enough.
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LTD saved my sorry self. I can not recommend this enough.
Me three. I could not have predicted that I would become permanently disabled in my early 30's, but without LTD I would be on welfare right now, instead of living comfortably on a small but workable income.
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Another vote for LTD. I'm so thankful my employer provided this to me. I totally took it for granted, now I'm using it.