Eliminating disability riders

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
mybogledhead
Posts: 41
Joined: Wed Feb 04, 2015 10:25 pm

Eliminating disability riders

Post by mybogledhead » Wed Feb 10, 2016 12:07 pm

Good morning,
I recently posted a question regarding whether or not my wife (an OB/GYN) and I needed disability insurance...I said "yes" but she wasn't convinced because of the cost. To keep a long story short, the subsequent comments and a slip on the ice while walking the dog convinced her it would be a good idea.

Now we are trying to figure out how to get the best coverage, but make it affordable. Here are the options:

Monthly replacement income: $13,000/mo with a benefit up to age 65yrs, includes residual disability, and the policies are true own-occupation. My wife is 34, and hopes to be pregnant with our first child soon, but is otherwise healthy and exercises daily.

Of note, the quotes are from Ameritas who, as I understand it, have never gone back and changed premiums for a group of people that previously purchased a LTD policy. I obtained the quotes from an independent salesman who also looked at other companies and determined that Ameritas offered the best options for her.

90 day non-cancelable guaranteed renewable with 3% simple COLA: $6516/yr or with 6% compound COLA: $6992/yr
180 day non-cancelable guaranteed renewable with 3% simple COLA: $5550/yr or with 6% compound COLA: $6025/yr

90 day guaranteed renewable with 3% simple COLA: $5595/yr or with 6% compound COLA: $5998/yr
180 day guaranteed renewable with 3% simple COLA: $4766/yr or with 6% compound COLA: $5169/yr

90 day non-cancelable guaranteed renewable no COLA: $5713/yr
180 day non-cancelable guaranteed renewable no COLA: $4748/yr

90 day guaranteed renewable no COLA: $4920/yr
180 day guaranteed renewable no COLA: $4090/yr

Only my wife and I can decide what we can afford and how much risk we are willing to take. I'm hoping, however, that subsequent comments will help me determine where the value in these policies is. The WCI says non-cancelable guaranteed renewable is mandatory, but given Ameritas' history it seems it may be worth the gamble to decrease the yearly premium by almost $1000. He (and others) also say that the COLA is a good idea for people who are early in their careers and who, like us, have educational debt and a fledgling retirement fund, but statistically, most claims last fewer than 3 years.

Thanks in advance for your thoughts!
Last edited by mybogledhead on Wed Feb 10, 2016 12:29 pm, edited 1 time in total.

climbhigh
Posts: 13
Joined: Fri May 30, 2014 1:54 pm

Re: Eliminating disability riders

Post by climbhigh » Wed Feb 10, 2016 12:15 pm

...it may be worth the gamble...


In my opinion, disability insurance is not something to gamble with (well, insurance in general for that matter). Using your own argument you could just take the "gamble" that you'll never need disability insurance and just go without. I personally would not recommend cutting corners to save a few bucks.

User avatar
simplesimon
Posts: 2973
Joined: Mon Feb 25, 2008 8:53 pm
Location: Boston, MA

Re: Eliminating disability riders

Post by simplesimon » Wed Feb 10, 2016 3:25 pm

Averages don't work well in assessing your own particular situation. Insurance is best for worst-case scenarios. $1,000/year doesn't seem like much considering the amount of coverage and guaranteed premium. Of course, go for it if you're less risk averse.

Post Reply