1. Mr. Groovy and I both had employer life insurance with a payout of 2X our salaries. Several years ago we both got term life policies. Although one broad standard is to buy 10X your salary, we went with $250K each, which is certainly less than that. But with no debt and no kids that’s what we were comfortable with.

    Are you going to get term policies? I’m sure the quotes you got were pretty cheap. Since you don’t have children I would think about going with a $500K policy for each of you.

  2. The other one you both 100% need to have, through work or otherwise, is disability insurance. I’ve been looking into it, and realistically, “future earnings” are the biggest asset any of us alleged-millennials have, so it’s important to know how much you’re covered if you couldn’t work! As a teacher you’ll (hopefully) have a much easier time of it because you won’t change employers as much as people in the private sector (three jobs in four years, hiiiiii) so once you know your work policy, you should be all set!

    But yes. Disability insurance.

  3. Agree with Des that Disability Insurance is super important, it’s also pretty expensive sadly. My individual disability insurance policy costs more than double my life insurance…and my life insurance could be cheaper. 😀

    You could say I’m currently on the beer truck plan:
    -My life insurance will pay out my parents a million bucks if I get fatally run over by by a beer truck.
    -My disability insurance will replace my current job income if I get wounded by the beer truck and it causes some sort of permanent disability, but not death. 😀

  4. Oh man. My in-laws have childproof cabinets that are unlocked with a magnet…that went missing…until they baked a cake. So stinky! Plastic and ovens do not mix well, and I share your pain.

    As for life insurance, it’s important to have some outside of work too. If (knock on wood) someone gets cancer and has to quit a job, then the life insurance is gone too and the person is then uninsurable.

    • Oh my gosh. I was sauteeing a stir fry on the stove and was trying to pop in some egg rolls in the oven as a treat for my husband. I kept smelling the plastic, but I thought it was the stove! Then I saw the orange goo on the oven racks. ZOMG. Not a good dinner!

      That’s an interesting point about looking for coverage outside of work. I will have to go back in my benefits plan to see how that works. Like you say, maybe it’s smarter to look for coverage outside. The quotes I got were really reasonable, so it might be time for another phone call.

  5. I wish I could afford more life insurance at my age because I’d hate to leave my wife behind with that mortgage. But I have to agree with Des and TJ on long term disability insurance. That’s critical! Social Security reports that 1 in 4 people currently age 21 will be disabled at some point during their working years. I know for my wife, becoming disabled in her 30’s was devastating, but having that disability insurance money every month helps cover our medical and other expenses. Many people rely only on Social Security Disability, but it can take years to get approved and only covers a fraction of your previous income.

    • Yes, I have heard the horror stories about waiting forever. This weekend, I’m going to review the amount covered by my work. I may have to up that as well!

  6. Louisa

    Long, long ago, I remember looking at the benefits to my parents’ AAA membership, which included life insurance. I doubt AAA had to pay out often, as it only applied to situations like being killed by being hit with a golf ball or struck by lightning. But at that time, it was an included benefit.

    As you look at options, or someday clean out old files, look for such benefits. Consider organizations you belong to or other accounts you have, including credit cards and auto insurance, and see if they offer you anything of value. We get lots of mailings that we have $10,000 coverage from the credit union that has our HSA accounts (if we return the forms), (and don’t we want to buy more?). I don’t think those sorts of places have the best rates, but you might as well put what you do have into a tidy list in the very unfortunate situation that you need it.

  7. Jan

    We actually went with term life insurance over mortgage insurance that the bank offered. It was less than half the price and covers over 8x what we owe on our mortgage and the mortgage insurance wouldn’t cover all the other costs. Way better decision in our scenario.

  8. Morgan

    Life insurance through your work would likely be cancelled if you needed to leave work… such as with a major disease that will eventually cause your death. If you have an option, I would drop the coverage through work (unless it is 100% free) and pick up independent coverage.

    In fact, my two cents, is that in an ideal situation you might consider TWO term insurance coverages. My spouse and I have 10 year term, at 200,000 and 30 year term at 500,000. The assumption is that the 10 year term will see us through paying off the mortgage, the end of life costs such as the funeral, and allowing some time off work. The 500,000 continues on past the point that this term is up, lasting until we are 65. We base our retirement on plans for income from both of us. Some of which lower when one of us dies, such as social security. The second policy is to cover that economic loss for the spouse. (based on a loss of about 500 per month from 65 – 95 then inflation considered). As we get closer to the expiration age on the policy, the less likely the partner is to need it because we will have both been around long enough to supplement the retirement fund ourselves.

    We pay more than most at about 160 per month for insurance right now and that will drop to 120 in 8 years when the first policy expires. It would have been a little bit cheaper to get a joint first-to-die policy rather than individual policies but the thinking is that if one of us dies early, the other will still want to have good life insurance for their next partner. 😉

    • That’s a really important consideration that I hadn’t made! I’m actually expecting some other quotes this week, and I have a few more weeks to solidify things for open enrollment. I will, of course, keep the free (complimentary? included?) coverage from my district and my pension. But I will look into my outside options. Thank you for the insight!

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