Comments on: It Is Amazing What Some People Will Insure While Ignoring Their Most Important Asset

By: The Need for Disability Insurance - It Can Save Your Financial Life : Generation X Finance

Mon, 28 Jan 2008 16:07:59 +0000

[...] visiting! When most people think about insurance, the first things that come to mind are health and life insurance. We all realize how important it is to provide insurance that can pay doctor bills when we’re [...]

By: » Money Madness, Round Two @ fivecentnickel.com

» Money Madness, Round Two @ fivecentnickel.com — Mon, 12 Mar 2007 03:09:03 +0000

[...] Introducing the 401(kid) defeated It Is Amazing What Some People Will Insure While Ignoring Their Most Important Asset [...]

By: Posts I Enjoyed Last Week - The Sun’s Financial Diary - Accumulating wealth is like building The Great Wall, one brick at a time

Mon, 22 Jan 2007 16:50:10 +0000

[...] Jeremy presents a case of getting your most important asset insured. At the other end, David cites a MSN Money article on some useless insurance policies you may want to abandon. [...]

By: Super Saver

Super Saver — Sun, 21 Jan 2007 13:34:23 +0000

Jeremy,

Excellent post with great points.

Your article also provided me with a new insight about insurance. I hope I “never” need to use my life, major medical, disability, car, umbrella, etc. insurance. However, I have the insurance for the unforseen case I need it.

As you point out, it seems folks expect that they will need to pay for lost or damaged phones or electronics repairs, and therfore buy warranty insurance. If it’s expected, it shouldn’t be insurance it should be “planning”

One caution I would give about life, major medical etc, is to avoid over insuring. For example, single people with no dependents don’t need much, if any, life insurance.

By: Golbguru

Golbguru — Thu, 18 Jan 2007 16:07:44 +0000

Couldn’t agree more with what you said in your comment “David, you are correct, when you die, YOUR worries are over. But if you have a family, their worries are just beginning.”

There is such a thing as AD&D insurance (Accidental death and dismemberment), usually comes very cheap. Someone on a $20K salary can be insured to something like $200K for like $8 per year…do you think that’s one feasible way of doing it?

By: Jeremy

Jeremy — Thu, 18 Jan 2007 01:59:09 +0000

David, you are correct, when you die, YOUR worries are over. But if you have a family, their worries are just beginning. Funerals aren’t free, and if you were bringing in a significant amount of income to the family and it suddenly disappears you put your loved ones between a rock and a hard place.

Like you said, your ability to earn income is the most important asset which is why you need life insurance to replace it. Disability insurance is equally important but I did not include it because almost all employers offer some sort of disability insurance. And since it works differently than life insurance by replacing income as opposed to just a lump sum it can be much easier to cope with than death.

So both are important without a doubt, but a basic group disability policy may already provide for 40-50% of your salary, and then when looking at disability through social security you can wind up in a situation that isn’t as devastating and completely losing a source of income.

Glad you brought that up.

By: David Oster

David Oster — Thu, 18 Jan 2007 00:05:25 +0000

If you die, your worries are over. Your most important asset is your ability to earn money.

You need disability insurance more than life insurance, particularly since your chance of being medically unable to work for awhile is greater than your chance of dieing during your working years.

By: Jeremy

Jeremy — Wed, 17 Jan 2007 22:31:58 +0000

You’re right, you shouldn’t be without adequate coverage when it comes to having children. As just a young couple without kids you can get buy with minimal coverage that is probably provided by employers, but by bringing a little one into the world you now have a lot of responsibility to go along with it.

And like you mentioned, it really is too cheap not to buy, which was the driving force behind this post. Insuring your life for half a million dollars is probably going to cost less than insuring your car, yet it is the furthest thing from people’s mind… until it is too late, then people wish they had taken action before something happened.

By: Sun

Sun — Wed, 17 Jan 2007 19:10:47 +0000

We never thought about buying a life insurance before our daughter was born because it seemed unnecessary with both of us healthy. We bought the 30-year $500K term policies last year from MatLife and it was quite affordable (less than $800 per year in total). For people who have young children, I think that money is worth spending.