isn’t this insurance really cheap because people don’t typically die this way? My credit union offered me a $5,000 policy for free.
SnarkWillBeBanned on
Everything is comparing risks versus rewards.
Even as a construction worker, he is more likely to die from illness than from accident. Disability is way more likely to happen from something that doesn’t dismember him.
He needs enough life insurance to pay for the kids to reach adulthood. Enough to pay for you to get education/training to where you can earn a living. (Not just get a job, but a job that pays a living wage. And yes, if you’re already there, that adds nothing.) Maybe enough to pay off debts. Also, these obligations won’t last all his life so term insurance is the low-cost way to go.
He needs disability insurance. Not dismemberment, disability. He needs to get paid if he can’t work, not if he loses an arm. As a rule of thumb, 75% of income is a reasonable benefit amount (he’s not incurring expenses to go to work). Of course every family is different, so that’s a very rough guide. Policies come with a waiting period: the amount of time you have to wait after becoming disabled before they start paying out. A one month waiting period (or less!) is extremely expensive, a six months waiting period is much more reasonably priced. That means you need to have 6 months of living expenses available somehow. (The lowest risk option is in a bank account. If you don’t have that, somehow you’ll get by, but it won’t be pleasant.)
The only thing worse than AD&D instead of life insurance and long term disability insurance is no insurance at all. (There’s a reason that’s called “going naked”.)
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isn’t this insurance really cheap because people don’t typically die this way? My credit union offered me a $5,000 policy for free.
Everything is comparing risks versus rewards.
Even as a construction worker, he is more likely to die from illness than from accident. Disability is way more likely to happen from something that doesn’t dismember him.
He needs enough life insurance to pay for the kids to reach adulthood. Enough to pay for you to get education/training to where you can earn a living. (Not just get a job, but a job that pays a living wage. And yes, if you’re already there, that adds nothing.) Maybe enough to pay off debts. Also, these obligations won’t last all his life so term insurance is the low-cost way to go.
He needs disability insurance. Not dismemberment, disability. He needs to get paid if he can’t work, not if he loses an arm. As a rule of thumb, 75% of income is a reasonable benefit amount (he’s not incurring expenses to go to work). Of course every family is different, so that’s a very rough guide. Policies come with a waiting period: the amount of time you have to wait after becoming disabled before they start paying out. A one month waiting period (or less!) is extremely expensive, a six months waiting period is much more reasonably priced. That means you need to have 6 months of living expenses available somehow. (The lowest risk option is in a bank account. If you don’t have that, somehow you’ll get by, but it won’t be pleasant.)
The only thing worse than AD&D instead of life insurance and long term disability insurance is no insurance at all. (There’s a reason that’s called “going naked”.)