# Insurance



## Alexandra (Apr 3, 2009)

I notice that while a lot of folks are upfront about their investments, there is very little talk about being insured. 

To me, insurance is a key component of financial planning. It takes one awful unforeseen life event to bring even a fiscally responsible family to financial ruin.

So here are my questions for the forum:

Are you insured? If so, what kind of insurance do you have? If not, why not? What does your family picture look like? What do your genes have in store for you?

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I am happily married, with one daughter, and I work full-time making pretty decent money. I am adopted, so I have no idea what genetic tricks will come to play later on in life.

We have term-ten life insurance as well a partial universal life insurance policy which will pay dividends upon retirement. We also have critical illness insurance, and long term disability and long-term care insurance.

Some may say we're over-insured, but I sleep pretty well at night ;-)


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## FrugalTrader (Oct 13, 2008)

I'm a big believer that insurance should only be purchased if you have people "depending" on your income. Having said that, we have a 1 year old, so both of us have term life along with disability insurance.


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## Alexandra (Apr 3, 2009)

FrugalTrader said:


> I'm a big believer that insurance should only be purchased if you have people "depending" on your income.


Does "people" include yourself? I agree that life insurance should be purchased when you have a family - I think things like health insurance are for everybody.


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## CanadianCapitalist (Mar 31, 2009)

We both have term-10 life insurance, short and long term disability insurance. I don't think we have critical illness insurance.


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## Ben (Apr 3, 2009)

We have no kids yet, but that situation could change before I had a chance to update the insurance planning. We recently got 5-year term life insurance, and are about to cancel the mortgage insurance. The payment amount would pay off the mortgage with a little extra to take care of a few more things. If we have kids, then we would immediately look at increasing the amount. As it stands, if I knock off, she stands a fair chance of finding a replacement hubby, being young, good looking, (and newly rich)! And if I'm that last man standing, well, I guess I can take care of myself.

I have disability insurance for 70% of my salary through work taxable benefit. I believe my wife also has 70-85% coverage, although I'm not completely sure off the top of my head.


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## Assetologist (Apr 19, 2009)

As the sole breadwinner of a family of 4, I have a substantial 20 year term insurance which terminates in 15 years. My goal has always been to acquire investment assets worth the value of the policy by that time.

I also have solid LT disability and a small amount of CI.

I plan to acquire joint and last universal life in the 10-12 years to cover probate etc.

The best free insurance is to work hard at maintaining healthy
relationships & lifestyle.


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## Alexandra (Apr 3, 2009)

Assetologist said:


> The best free insurance is to work hard at maintaining healthy relationships & lifestyle.


I love this! So true!


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## Alexandra (Apr 3, 2009)

FrugalTrader said:


> I'm a big believer that insurance should only be purchased if you have people "depending" on your income.


One more comment about this one...even if one partner is staying at home with the kids, you would have to replace that partner's labour with a salary if anything happened to them. Very few people would do that for free ;-)


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## michika (Apr 20, 2009)

I have nothing, however I also have no dependents, nor do I plan to have any dependents. My other half on the other hand gets disability through work, and term? life through his insurance plan. 

We would like to up our insurance however, at this time the quotes we received for mortgage insurance, life for me, and increased life for him, are about the price of a rather nice car payment per month. We already pay about $300 a month for home, auto, and pet insurance, and adding on the above pushes us to about $550 per month.

Should something happen to me, my other half really has nothing to worry about it, other then who will cook for him. However if its the opposite, it would work, however as the lower income earner I would have to make lifestyle adjustments.


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## FrugalTrader (Oct 13, 2008)

Alexandra said:


> One more comment about this one...even if one partner is staying at home with the kids, you would have to replace that partner's labour with a salary if anything happened to them. Very few people would do that for free ;-)


That's a great point, something I never thought of. In our family, we're both working, but we have enough insurance to cover all debt + education + provide some cash flow to offset the loss.


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## jgood76 (Apr 3, 2009)

Husband and wife both aged 33, with 3 year old child. We pay approx. $2,000 / year for the following coverage, with about half of that paying for wife's disability insurance.

Group plan - $1M life ins on wife
Group plan - $200k life ins on husband
Group plan - $7k monthly disability ins on wife (non-taxable, 90-day waiting period)
Group plan - $500k accidental death & dismemberment ins on wife
Group plan - $200k accidental death & dismemberment ins on husband
Group plan - $50k accidental death & dismemberment ins on child
Group plan - $50k critical illness ins on wife

Work plan - $200k life ins on husband
Work plan - $6k monthly disability ins on husband (taxable, starts as soon as sick days used up)


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## George (Apr 3, 2009)

michika said:


> We would like to up our insurance however, at this time the quotes we received for mortgage insurance, life for me, and increased life for him, are about the price of a rather nice car payment per month. We already pay about $300 a month for home, auto, and pet insurance, and adding on the above pushes us to about $550 per month.


Ouch. Those numbers seem really high to me. Our home insurance is about $400 per YEAR (~$33/mo), our auto insurance is about $1100/year (~$91/mo) and we don't bother with pet insurance - we have enough cash in our E-fund to cover any unexpected pet-related issues.

Our term life insurance ($400k, joint-first-to-die) costs us about $400/year. If you're young and healthy (and a non-smoker), plain term insurance is very cheap.


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