- Jul 15, 2014
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The real question is, how many of you have adequate LTD insurance... given the average age here, something most are far greater at risk of needing than Life?
Life Insurance
- Thread starter bradgator2
- Start date
- Oct 23, 2017
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What do you believe is "adequate LTD insurance?" I have LTD, and have since my late 30s, but determining what is "adequate" has always been a challenge to me.
- Sep 23, 2017
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Great question and often overlooked. Needs its own thread. I’m maxed out. My last increase at age 48 has hefty premiums. Glad I locked in a bunch when I was young. I will drop most of it in five years because I will have enough assets and I can take my pension if needed. I will redirect the premiums into something fun.
- Aug 17, 2018
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Great question.
One thing I'd observe is to avoid going "cheap" on a LTD policy. Many insurance companies interpret long-term disability in more general population terms as opposed to your specific profession. I'd say it's even worth negotiating for putting specific language in your policy that ensures it's tailored to your job.
Ex: There's an injury to a hand that does permanent nerve damage. You're still able to use it, but not nearly as much as the past. Doesn't prevent you from being a cashier at McDonald's...but you'll never be a surgeon again. And yes: this is an actual case an insurance company fought...successfully.
- Jul 15, 2014
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As you said in another post, and being a self-employed business owner, I agree on the "own" option. This is one area I do not skimp on and my policy is through my business insurance broker, but is a carried by Principal. I set my percentage at 75% of what my actual monthly payroll to myself is as that was more than adequate to cover all our expenses plus a little. My annual policy is $5800/year. I'm sure I could get it cheaper, but I don't try to save on insurance premiums vs making sure I have great coverage. I don't try to save pennies when it comes to things that are important, like insurance, accountants, lawyers... I'm willing to pay. As much as I have paid my lawyers, they have returned ten fold on the dollar, easily... i feel the same way about insurance. It's been covered more in recent years, but we, as males in our age range, are MULTIPLES more likely to be LTD than dead, yet everyone focuses on Life instead of LTD insurance. This is why people go bankrupt when ill or injured, because they can't afford the health premiums with loss of income... ALWAYS gets ignored.
There are SOOOOOO many great topics/comments in this forum that I want to respond to, but for my story, which is a little bit different than most, they all thread together. What I will probably do is start a thread about how I am set up and what and why my philosophy is what it is regarding personal finance (and all my business finances tie into that). I don't disagree with ANYTHING that ANYONE has said ANYWHERE, but most of what I have read in all the threads is what I would call "traditional/old paradigm" approach vs. what I am doing. Again, that in no way, shape or form means that I think there is anything wrong with what the "traditional" approach is, I just think that things fundamentally shifted starting in the 1970's (pension vs. 401K type stuff) for all this planning and the threads reflect that. My approach definitely involves more "risk tolerance" in terms of life choices (not necessarily personal finance choices) as I wanted to break free as much as possible from "traditional career/investing/retirement" path as possible because since the 1970''s, EVERYTHING in these choices we are talking about survive at the whim of the congressional pen (e.g., SS, 401K, IRAs, SEPs, TSPs, college savings plans, most insurance, inheritance issues...) and I'm guessing more people here than we think will eventually get means tested out of (or greatly reduced "benefit") in our lifetime. In our kids lifetime, unless there is drastic change, I expect to see top 5% be means tested out of most tax beneficial retirement vehicles if not some (or all) govt taking of 401K/IRA money "for the greater good." I don't mean to start ANY political discussion with this, it will just explain my philosophy and what I am doing.
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- Jul 15, 2014
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^this. Gotta be able to replace a percentage of actual monthly income to a level that covers ALL monthly/annual expenses, especially other insurance premiums... More people are LTD FIGHTING cancer than dying from it at our age. They may have a great Life policy, but no LTD to cover the bills that include health premiums/cost while fighting it.
PS I may never post in the PF again! ;)
- Nov 9, 2015
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Not that I recommend others do as I did, but I never had any insurance outside of my work policy. There is social security if you leave family, and well a spouse can work as well.
Lots of times your death will be due to something covered by other insurance as well.
Most financial experts say term is the way to go, but as I always say nobody knows your desires like you do.
Lots of times your death will be due to something covered by other insurance as well.
Most financial experts say term is the way to go, but as I always say nobody knows your desires like you do.
- Sep 23, 2017
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Ok which one of you are going to start the Long Term Care insurance thread?
I know a bunch of you are in the sandwhich age bracket. Taking care of kids and parents. Well I went through it with both parents over the last four years. Neither had LTC. They refused it when the topic was breached. Very short sighted. It is expensive to have care brought in. Average care at home is $25/hr at home and in a facility its about $350 per day. Assets get wiped out real fast.
I know a bunch of you are in the sandwhich age bracket. Taking care of kids and parents. Well I went through it with both parents over the last four years. Neither had LTC. They refused it when the topic was breached. Very short sighted. It is expensive to have care brought in. Average care at home is $25/hr at home and in a facility its about $350 per day. Assets get wiped out real fast.
- Jul 15, 2014
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I’m lucky, everyone died young. ;)
- Oct 26, 2015
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Most people do not die suddenly. They develop a chronic disease (such as heart disease, cancer, Alzheimer's, etc) and die after a prolonged period of time. This allows the policies to expire and not be renewed. This helps insurance companies keep claims to a minimum. One danger of depending on term insurance without guaranteed renewal options is you may become uninsurable just at the time you need the most coverage.
- Sep 23, 2017
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Yes and no, most have features that allow for the conversion to permanent insurance. Most term polices lapse on haelthy people. They shop it or outlive the coverage.
- Oct 5, 2018
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I've always done term only. Only difference is I wish my current policy which expires in a few years I went a little longer.
I am sure there are instances where whole or universal may make sense but I looked at several quotes for my wife's employer on key employees and the guaranteed returns are absolutely awful. I honestly couldn't recommend any of them. The main reason is they are have all kinds of commissions and fees buried into them.
I am sure there are instances where whole or universal may make sense but I looked at several quotes for my wife's employer on key employees and the guaranteed returns are absolutely awful. I honestly couldn't recommend any of them. The main reason is they are have all kinds of commissions and fees buried into them.
- Jun 9, 2014
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Founding Member
The guaranteed assumptions are generally much further from reality than current assumptions. They assume the contractual interest-rate floor and maximum amount the insurer can charge. Those assumptions can happen, but they seldom do.
- Oct 26, 2015
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The big disadvantage of term insurance is that if you develop a medical condition and become uninsurable you will not be able to renew your insurance and your family will be without protection. Since we can't predict the future there's no easy answer.
- Oct 5, 2018
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You can always buy a longer policy up front.
Whole life or universal are multiples more expensive than term. An expensive guaranteed term policy wrapped in a crappy investment. You are paying a **** ton for the security of that policy.
- Jun 12, 2014
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Founding Member
Yup. I bought a 20 year policy at the age of 28. When I turned 40, I knew that policy was expiring in 8 years. I crunched some numbers/quotes and new policies were shockingly more expensive for a 48 year vs 40 year old. So I went ahead and got another 15 year policy and will be doubled up until the first one runs out.
Recently did the exact same thing for my wife.
- Jun 13, 2014
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Founding Member
My 20 year term runs out in May. I was paying around $500/yr for a $500,000 policy. I also had policies through work as did my wife. To renew for another 20 years it goes from $500/yr to $6,800/yr. We're pretty set so THAT ain't happenin'. 
