I am a baby Mustachian looking for some advice on disability insurance. My husband is not a Mustachian at all, but for purposes of this topic, that's not relevant. We have about 90k in various traditional retirement vehicles, about 180k in student loans (ouch), and owe about 206k on our mortgage (again, ouch). I am the sole breadwinner if you don't count his job working in the church nursery for $40 per week, and I am a pharmacist. We have two little kids.
I have a disability policy now, which we purchased a couple of years ago when I was working part-time, and I didn't qualify for most policies. The only one my financial advisor could find for me pays benefits for only 2 years. This will be in addition to 1/2 salary that I get through my employer's LTD benefit, and anything I can pull in through Social Security. I pay $220 every 6 months.
Well, now I am full-time and qualify for better policies. My financial advisor wants me to switch to another policy that will pay me benefits until I'm 65. This will cost about $100 per month in comparison to my current $36.
But I wonder if a 2 year period would be enough to, hypothetically, instead downgrade our house and send my husband back to work, if I did get disabled and it looked like it would be long-term. Right now I clear about 6k a month and between debt payments and living expenses we're spending most of it, and I'm throwing any extra at the debt. So I would clear ~3k a month from the policy through my job, and maybe some through Social Security depending on how disabled I was. My husband might be able to pull in 2k a month. My financial planner says that since I am the breadwinner we need to protect my earning power and our standard of living.
And if I were too disabled to work, what else would we need that we don't need now, that I would need to use that money to buy? Care for our children if I were too off my rocker to be a decent caregiver? Home health aide? I don't really know.
Thoughts?