Ditch disability?
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Anonymous
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I am a dentist. I pay $1280/yr in disability insurance.
HHI: 220K (we basically each earn the same) Take home (after maxing out husbands 401k and health insurance costs) roughly 10k/mo 99k school loan - 1200/mo payment (is $900 but I pay more) 150k home equity maxed out - $600/mo payment 285k left on mortgage (12 years left on 15 yr mortgage) - ~3K mo/ payment 1300/mo kids tuition 1200/mo to my SEP Ira 400/mo car payment Utilities inc phone ~400/mo Food- ~ 600/mo Do I ditch the disability ins and chance it? Could we make it work God forbid something happens? And what really are the chances of something happening? My husband says ditch it - we could always refinance mortgage, stop my IRA (which if I wasn't working I wouldn't be eligible for anyway) Public school for kids, etc. What say you, DCUM? |
Anonymous
| You can't afford the car payment or the private school. Can you get a less expensive car? Send kids to public? |
Anonymous
We can afford it now. But if I lost my job we would ditch private school and prob trade in my car. The question is do I keep the disability for peace of mind or ditch it and take my chances? |
Anonymous
| Don't drop disability. Stop paying extra on the student loan. And consider refinancing to a 30-year mortgage if money is that tight. |
Anonymous
It's not that money is tight - we can afford to pay it right now. But I'm thinking that $1200 could go to pay toward my car, or student loan, or anything else. Just wondering if I really really need the disability. |
Anonymous
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Op, this is a risk aversion question and it is unique to every person. I'm 44 and have never claimed disability (thanking my lucky stars), but I pay for the additional insurance my employer provides because I am single and have to pay my bills if I go out for a period of time.
You have two incomes and could make some quick adjustments in your finances if you became disabled. So do you "need" it? No. Should you keep it? That is up to you. How far in debt are you going to go if there was no disability payment and you made all the financial adjustments that you could? |
Anonymous
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Honestly that premium is pretty low for the peace of mind it should be offering.
Is the policy for long or short term coverage? If you are really trying to carve out extra cash, perhaps drop the short term portion, IF you have a dedicated emergency fund equal to your needed expenses until the long term portion kicks in. And by dedicated, I don't mean a general fund that is used for a new roof or water heater and disability. |
Anonymous
| I would keep the disability. You cannot expect a spouse to support you, especially if you end up disabled. See it happen all the time. |
Anonymous
| I would keep it. I became totally disabled overnight in my 20s. My disability insurance income is what enables me to afford to continue to get quality medical care, without bankrupting my family. |
Anonymous
| Are you crazy??? No, do not ditch disabilty. |
Anonymous
| So your husband maxes his 401k yet wants you to ditch your disability? Nice. |
Anonymous
| Why would you even consider this unless the predicament is food/shelter vs. disability -- which it isn't?? It's about $100/month. Can't you downgrade your car? Or send your kids to public school. Or downgrade your phone/phone plan? Or eat less? |
Anonymous
Exactly. Disability insurance is not your budget issue. It costs you very little each month. Eat out less, don't get Starbucks. That $100 is easily found in your budget. |
Anonymous
| Why is your disability so high, we pay 230 a month to replace 9500 / month income. |
Anonymous
| Oh nevermind, you said per year, that looks good |