1 Million Dollars

Thursday, April 28, 2011

Disability Insurance

Everyone who has a job and needs the income should have disability insurance, but it can be very expensive. Disability insurance pays about 60% of your wage if you are injured and cannot work. Some pay only if you are unable to work any job, other will pay if you cannot work in your current position. The real kicker is that if you buy disability insurance not through your employer it costs about two to three percent of your salary. Now if you are like me, you are sitting there going "ouch". I'm suppose to save 10-20% of my salary, now you saw I have to give up another 2-3% for disability insurance? And we are not even counting in taxes here.

But disability insurance is important and worth the cost. What are you going to do if you can't work? What can you do if your job requires you to talk and you have lost your voice? Or what about loosing a hand? Do you think you could do your current job if you lost a body part or were in a wheelchair? The only benefit on buying disability insurance not through your employer is it is not taxable earnings but if your buy disability insurance pretax, through your employer, it will be taxable earnings.

My fiance and I have been looking for disability insurance for him for a few months but again, it is very expensive. We could only find disability insurance costing 3% of his salary. We had decided to wait to the wedding and then just bite the bullet and get it. A month ago we were at a home show and MetLife had a booth there. Since I am an eternal optimist, I thought lets see if they have a lower price. We just finished the paperwork and MetLife gave a quote that is under 2% of his salary. What seemed to make a difference with them is that my fiance is a researcher and paid by the government and that is something MetLife considers. Also, his lifestyle and job are not risky and I believe someone with a risky lifestyle would pay more. With that combination MetLife made us an amazing offer. I honestly was shocked on how low the price was. We went home and I read over every little bit of the paperwork and it seems legitimate.

Side note, I make no money off this post.

Because of the savings, my fiance and I are now able to afford life insurance as well and may also be able to put more into our retirement accounts.

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