Let
me just say first, if I can manage to figure this out, you can too.
I’m not the most savvy of internet users - more proficient than
average, maybe, but definitely no expert. In fact, I’m finding it
difficult to navigate the world of long term disability insurance from
my computer and finding legitimate companies that aren’t front pages
for affiliate ads to companies I have never heard of, but I am trying.
Earlier this week I wrote about my spouse’s employer offering short term disability insurance, and us exploring if it was a good idea for us. Disability insurance has long been on the list of “things we should have but as of yet do not”
- we have made progress on the list but disability insurance isn’t
something we’ve tackled. But we should. Writing about short term
disability insurance brought the long term option to the forefront of
my mind, and ultimately after many encouraging comments kickstarted me
actually looking into it.
Let me say, things I don’t know anything about intimidate me.
The activation energy required for me to take those initial steps, for
really anything, seems enormous. It was that way with getting life
insurance, buying a house, even getting out of debt. It was really
hard to start, but once we did get ourselves in gear and started taking
serious steps, the process went rather quickly.
So now I’ve taken those first steps, and hopefully that means the
activation energy is overcome and soon we’ll be on the way to having
long term disability insurance for my spouse. We decided to just look
at coverage for my spouse at this time for several reasons. One, our
goal is to be able to live on my spouse’s income alone. At this point,
it would be very tight and our debt elimination would stall, but we
would be able to get by solely on my spouse’s income. We wouldn’t be
getting ahead, but we could survive without my income. Second, of my
three “jobs”, only one has an actual employer (taekwondo), tutoring is
a contract position and I am not an employee, I am an independent
contractor, and blogging is self-employment. So it would be very
complicated if not impossible to get coverage for my entire income.
And third, the blogging is partly passive via advertising revenue so it
wouldn’t disappear completely immediately if I wasn’t able to do it for
a period of time. In the future, we may look into some sort of
coverage for me too, but at this time, it is my spouse’s income that we primarily depend on, so it is my spouse’s income we need disability protection on.
So, on to the actual process. I did a number of searches online for disability income insurance plans,
as well as took suggestions from the comments on my previous post, and
found one company I could get a generic quote online within 24 hours
(Guardian), and then two others that I could ask a representative to
contact me to discuss a quote (MetLife and State Farm). I also called
our current insurer for home, auto and life, Allstate, and talked to my
agent about getting a quote. I did try to find information about
several other companies but I came up empty as far as online searches
went, so I moved on. Four quotes should give me a good idea at least.
My spouse’s employer actually uses Guardian for the short term
disability policy they are offering, as well as their dental coverage
(which we have currently). So I am somewhat familiar with them. They sent their online quote, and there were a number of options.
The coverage was to replace 70% of my spouse’s current salary, and
would be tax free if we paid the premiums with after-tax dollars (which
we would). The policy covers if my spouse is disabled and cannot
perform his current occupation, even if he can be employed in a
different one, is guaranteed renewable and non-cancellable on their
part until the age we select (more on that in a minute when I discuss
options) and had two additional things I could add to the policy for
an additional cost - I can elect to have the policy adjust upwards
until age 55 as my spouse’s income increases, and I could elect to have
a rider that starts coverage when as little as 15% of income is lost
due to disability. I also had two variables I could change that
affected the cost of the premiums - the length of the policy and the
waiting period for it to become effective after a disability. I could
have the policy last 10 years, until age 65, and until age 67, and I
could start coverage as little as 60 days after a disability or as long
as 360 days.
For my spouse, the policy we were quoted, depending on if we added
the additional riders and what variables we selected, the coverage
would cost anywhere from $57 - $215 a month. We are leaning towards a policy that would start 180 days after disability and provide coverage until age 65,
which would be about $100 a month (starting 360 days after disability
is $90/month). We would also include the additional riders for
automatically adjusting upwards as his income rises and the residual
disability (coverage at 15% or more disabled), which is included in the
$100 (or $90) a month. I’d like to elect the 360 days after disability
one instead, but I don’t think having that large of an emergency fund
for us is likely for a good long time.
We haven’t decided if we will go with this company, of course, but it is nice to get the ball rolling and at least find out some information about coverage and costs.
We have many more quotes to get information about and compare to this
one. But the ball is rolling. This seems to be the week I tackle a
bunch of “now I’m really an adult and I need to think about this”
questions. And if I can do it, you can too. Protect your financial
peace.
(www.paidtwice.com)
