I am 26 years old, no dependents, and already have good health insurance through my government job.
I was thinking about getting AD&D insurance. I am a mailman so if I lost a arm or leg I might have to quit. Anyone have experience with this stuff? I don’t know if it is worth it or just a big scam. What should I look for in the fine print if I should choose to sign up?
I wonder if your employer offers this option free of charge? My company provides accidental death and dismemberment for free.
You could take the time to mathematically calculate what your potential losses would be if you were not insured, then compare that with the price of insurance and decide if you feel it’s worth it. My general take on insurance is that it is almost always worth it. We think that accidents and catastrophic events will never happen to us, but something’s bound to happen sooner or later, and that one event could be your financial undoing if you’re not insured. rereads second sentence
Occasionally we have a guy or gal come to our office and try to sell us AD&D insurance which is what made me distrustful in the first place. I don’t much like people trying to sell me stuff, especially if I don’t understand all the terms.
So how do I go about finding out more about disability insurance? How much is to much in terms of costs?
I am an insurance agent (both Property/Casualty and Accident/Health) but I am not your insurance agent. Please keep in mind things are different from state to state and you should talk to your own insurance agent for the best possible information.
Accidental Death and Dismemberment coverage covers you in the event that, outside the workplace, you suffer an accident that causes you to die or be disabled. This generally doesn’t cover things that happen in the workplace because you would be expected to be covered under worker’s comp and any liability insurance your employer may have. *Depending on the policy sometimes you are only covered in an accident if you are severely disabled (losing 2 or more limbs, losing sight in both eyes or losing hearing in both ears, etc.) and even then it is sometimes dependent on whether you have lost the ability to do any job or just your job. For example, if you lose both legs you can do a lot of work in call centers or other places where you basically sit at a computer all day so they aren’t necessarily going to pay to replace your salary because you can still technically earn a salary somewhere else.
Honestly if you don’t have a family or anyone who depends on you there is no need for a life insurance policy. Disability insurance is something you should have if you can afford it because statistically you are more likely to be disabled than to die at 26 but this might already be available to you through your employer. Check that out first before you buy any additional coverage. Make sure you have renters/homeowner coverage before you buy disability coverage because you are much more likely to have a flood or fire at home than you are to be disabled.
*I don’t work with this kind of thing day to day so I am only going on what I remember from my training for my licensing exam.
The accidental death part ain’t gonna do you any good. Your creditors and/or beneficiaries may appreciate it, but you’re gonna be dead.
Dismemberment? Eh. I’d rather have a disability policy. Don’t necessarily have to lose a limb to collect on disability. They come in both “short term” and “long term” versions. I carry short term disability, because it can pay me up to two years, which should be enough to last until I can get on Social Security Disability, since I have enough work history to qualify.
Yup. Life insurance for a single person with no dependents is kind of silly. We buy short term AND long term disability insurance on my husband because we’d need the income if some accident should he be sidelined due to an accident or stroke, etc.
Aside from a cash settlement paid to the beneficiaries, doesn’t life insurance also cover funeral expenses? I’ve never been married and have no children, and I have very little debt (I rent my home, my car is pre-owned and paid for in cash, I have no credit cards, blah blah blah) so I’m not to concerned about a big payout when I die.
I am concerned, however, that my younger sisters would get stuck with my funeral/burial expenses.
Yes, that’s true, but many copanies provide some small life insurance payout as an employee benefit. One of my benefits is a life insurance policy that pays out 1 year’s worth of salary to whoever I want. That is plenty to cover any funeral costs, and there’s no cost to me.
This board cracks me up sometimes. I didn’t even realize how that could be interpreted until you pointed it out. And to answer your question, I love my job but I would quit tomorrow if I won the lottery or something.
So I guess I wouldn’t be getting AD&D insurance but I will ask about disability insurance at work tomorrow. Thanks for all the help.
Your assets should more than cover your funeral expenses, esp if you own your home. (When you die, your assets are used to cover any debts, including taxes, credit cards, funeral expenses etc., prior to the distribution of what remains to your survivors.)
Of course, if you die intestate (without a will), then your sisters may have to pay for the funeral upfront and then wait to be reimbursed while your estate goes through probate court. You can avoid that headache (at least in Ohio) by drawing up a will. Ideally you should hire an attorney who specializes in estate planning, but since you’re single with no kids, you could probably get by with one of those DIY will packages. (But do get it witnessed and notarized.)
Another thing: Make sure your sisters are listed as co-beneficiaries on any insurance policies, investment accounts, etc.
Don’t buy pre-paid funerals. Not only will you grossly overpay for it when you consider how many years will pass between now and your death, but it will be worthless if the company goes under.
If you are still concerned about leaving your sisters holding the bag, buy a term (not whole life) life insurance policy for $50-100k or so, naming your sisters as co-beneficiaries. If it’s not provided for free by the USPS, it should be dirt cheap for someone as young as you are, assuming you don’t have cancer, diabetes, etc.