When I finished my undergraduate degree in 2005, my first company offered me both life and disability insurance. Both seemed unnecessary at the time, but I was compelled by what I believed to be a good deal: pay just five dollars or so per month for life insurance coverage worth 5x my annual salary. There were no physicals or medical questions to answer. The premium was based solely on age.
The disability insurance was too expensive I thought, at probably ten dollars per month, so I opted out of that nonsense. That would have provided me with an income at ~60% of my salary in the event that a medical condition kept me out of work.
I was happy to have life insurance when Jess and I purchased our house in 2007. This meant our mortgage would be taken care of in the event something happened to me.
In 2009, when I moved to a new company, I was given the option to take the life insurance policy with me. The premiums would remain the same, but there would be a little bit more paperwork sent to my mailbox at home. I accepted.
Fast forward to 2010, after my cancer diagnosis, treatment, and oncologist’s determination that my cancer is in remission, I’m unable to secure life insurance. SBLI initially offered me a $9,000+/year premium, then eventually outright denied me after I spent hours answering questions, and giving them both urine and blood samples. At $9,000 a year, I’d be much happier owning a Mercedes than an insurance policy!
My cancer diagnosis puts me at too high of a risk to insure even if the term ends in my mid-thirties. Why is this a problem if I already have a policy? It wouldn’t be enough to support a family (e.g. kids) very long, should my income disappear.
Thankfully, my new company has grown quite a bit since my start. This has included the addition of life and disability benefits negotiated for all employees. Again, these are the policies without physicals or medical questions. I jumped at the chance to add both.
The life insurance policy is by no means “set for life” money, but it would provide some time for my family to get long-term financials in order without me.
The disability insurance is a huge addition for me. While undergoing chemotherapy, I missed between 3-4 weeks of work, spread out over a few months. My company was supportive about this, but it helps when you already have three weeks of paid vacation annually. Toward the end of my treatment, I felt ineffective at work. My oncologist and nurses at Dana-Farber thought I should be on medical leave. At many companies, this is unpaid medical leave. Good luck with that if you’re paying a mortgage! This would have been a feasible option had I purchased disability insurance. Looking back, I probably would have gone on medical leave if I had known income would still be coming in. That would have alleviated some of the burden during chemotherapy.
I highly recommend that every young working person grab both life & disability insurance policies from your employers when offered. It is unbelievably cheap, and if you wait until a life changing moment occurs to trigger the purchase, it could be too late and coverage will be denied. It’s worth the five bucks!