Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
I’ve always subscribed to the notion that you should insure that which you cannot afford. Thus, we’ve been very good about doing things like keeping our life insurance coverage up to date and otherwise protecting our assets. Recently, however, I’ve been thinking more and more about long term disability (LTD) insurance as I’m concerned that we don’t have enough.
First, a bit of backstory… We have four young children, and my wife stays at home with them. Thus, I’m currently the sole source of financial support for our family. I have decent LTD coverage through work, but it really wouldn’t be enough to comfortably support us if I were disabled for a long period of time…
There’s a 60 day waiting, at which point the LTD coverage kicks in and replaces up to 60% of my salary. So if I’m not eligible for Social Security disability payments, the insurance will pay 60% of my income. But if I am eligible for other benefits, the insurance will top us off to provide a total of 60% income replacement.
The good thing about about this coverage is that it’s cheap, and it’s a good start. The bad thing is that it, like I said above, I’m the sole source of financial support for our family, and this coverage would leave us well short of a comfortable lifestyle if I were out of commission for an extended period of time. Moreover, it only applies to my “regular” income, and thus wouldn’t help make up the additional shortfall if my self-employment were adversely impacted.
So… I’m in the market for a supplemental LTD policy. Unfortunately, I know very little about what to look for, how much I can expect to pay, etc. Thus, this will be a major learning experience for me.
One interesting tidbit that I’ve run across thus far is that, because my employer-provided LTD is paid out of pre-tax dollars, the LTD income replacement will be taxable (further diminishing the value of 60% income replacement). In contrast, private policies are paid out of your pocket (with post-tax dollars) and the benefits are typically tax free.
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (693)
- Dish Network Customer Service SUCKS (536)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (329)
- How Much Should You Pay a Babysitter? (288)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (237)
- Will Mac OS X Lion Kill Quicken 2007? (191)