3 ms·

How reasonably priced is this to buy individually?

pc86 5y ago
The short answer is "next to nothing" especially for tech salaries. I did a generic search and questionnaire to see what actual quotes were. For a 35 year old non-smoker male in my zip code, with an office job, $84/mo gets $6400/mo in benefits if I become totally disabled. There's a ton of caveats (90 day waiting period, 10 year term benefit, medical exam etc) as with any insurance product. You can get partial disability insurance as well (this is total only).
- bradleyjg 5y ago
  What you really want is insurance that pays out if you cannot work in your given profession (e.g. software engineering) not insurance that only pays out only if you can’t even work as a greeter at Walmart. I’m under the impression that this is very expensive because of adverse selection effects.
  - pc86 5y ago
    This is called "own-occupation" (as opposed to any-occupation) and is more expensive but not astronomically so.
    - bradleyjg 5y ago
      It looks like about $250-$400 for a policy I would want. That’s not unaffordable but it’s not trivial either. Anyway, thanks for the nudge.
      - sgerenser 5y ago
        When I last looked into it, a good own-occupation disability policy from a highly rated insurer like Guardian ran about 3% of your salary ($3000/year if you make $100k). Could I afford it? Of course. But it’s not a no brainer like a cheap term life policy is. I ended up passing and my only protection right now is the disability insurance offered by my employer. Experts say these policies are almost worthless, but they’re better than nothing.
        flukus 5y ago
        At that point you're probably better off investing the money and hoping you don't need it in the first ~10 years. Even if you need to invest more than that 3% to get the same "cover", if you don't end up disabled you can use it for an early retirement. The money spent on insurance is gone forever.
        bradleyjg 5y ago
        The math doesn’t work out. If you save 3% of gross starting at age 22, get 8% returns, and target 50% of gross for disability income you only cross the threshold to make it to 65 at age 56. Like all true insurance, we’d expect disability insurance to be expected value negative but this isn’t something it’s practical to self insure.

pc86 5y ago

The short answer is "next to nothing" especially for tech salaries. I did a generic search and questionnaire to see what actual quotes were. For a 35 year old non-smoker male in my zip code, with an office job, $84/mo gets $6400/mo in benefits if I become totally disabled. There's a ton of caveats (90 day waiting period, 10 year term benefit, medical exam etc) as with any insurance product. You can get partial disability insurance as well (this is total only).

bradleyjg 5y ago
What you really want is insurance that pays out if you cannot work in your given profession (e.g. software engineering) not insurance that only pays out only if you can’t even work as a greeter at Walmart. I’m under the impression that this is very expensive because of adverse selection effects.
- pc86 5y ago
  This is called "own-occupation" (as opposed to any-occupation) and is more expensive but not astronomically so.
  - bradleyjg 5y ago
    It looks like about $250-$400 for a policy I would want. That’s not unaffordable but it’s not trivial either. Anyway, thanks for the nudge.
    - sgerenser 5y ago
      When I last looked into it, a good own-occupation disability policy from a highly rated insurer like Guardian ran about 3% of your salary ($3000/year if you make $100k). Could I afford it? Of course. But it’s not a no brainer like a cheap term life policy is. I ended up passing and my only protection right now is the disability insurance offered by my employer. Experts say these policies are almost worthless, but they’re better than nothing.
      - flukus 5y ago
        At that point you're probably better off investing the money and hoping you don't need it in the first ~10 years. Even if you need to invest more than that 3% to get the same "cover", if you don't end up disabled you can use it for an early retirement. The money spent on insurance is gone forever.
        bradleyjg 5y ago
        The math doesn’t work out. If you save 3% of gross starting at age 22, get 8% returns, and target 50% of gross for disability income you only cross the threshold to make it to 65 at age 56. Like all true insurance, we’d expect disability insurance to be expected value negative but this isn’t something it’s practical to self insure.