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Keeping Disability Insurance ?
Old 04-22-2007, 09:25 PM   #1
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Keeping Disability Insurance ?

I currently pay about $2400/yr for disability insurance.

I was thinking that once I ER I could drop this since there is no income to replace. Maybe ther might not even pay if I have no job?

Anyone know about this?
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Re: Keeping Disability Insurance ?
Old 04-22-2007, 10:13 PM   #2
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Re: Keeping Disability Insurance ?

I also just stopped working and have been paying for disability ins for many years. My premiums are due in about a month for the second half of year. I'm also not sure what to do.

I called my carrier and they said you don't have to be working at the time of disability but you do have to have earned income for the year. Call your insurer and ask the rules that they have. When I spoke to my ins co. the agent seemed strange when I asked the question, like I was trying to set them up for a false claim.

I may pay this one last time but still not sure, I do have earned income for this year.
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Re: Keeping Disability Insurance ?
Old 04-22-2007, 10:23 PM   #3
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Re: Keeping Disability Insurance ?

No, you do not need disability insurance if there is no income to replace. Spend the money on good health insurance.

Technically, as you approach ER, you have less and less need for disability insurance.

Before I FIREd, the minimum disability insurance (it was part of my work benefits) that I was allowed to have under our plan was 50% of salary. This was way too much for me -- much more than I spent and way, way more than I needed as I approached FIRE. But there was no way to reduce it, that was the minimum.

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Re: Keeping Disability Insurance ?
Old 04-22-2007, 10:23 PM   #4
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Re: Keeping Disability Insurance ?

I thought the purpose of disability insurance was to replace your income (at least in part) if you became disabled and could no longer work. If you are retired, why on earth would you keep it? To me it would be like paying for auto insurance when I no longer had a car.

When I retired I immediately dropped my coverage...I no longer have a need for it.

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Re: Keeping Disability Insurance ?
Old 04-23-2007, 04:14 AM   #5
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Re: Keeping Disability Insurance ?

You might want to check your policy provisions and see how coverage works. It would be tough to find out that you are not covered by some provision such as (cover 60% of your average earned income for the last 5 years)... they have to determine the payment by some rational means. Mine DI is through work... I have not read the fine print of a private policy.


Also, it seems to me unless you are intending to go back to work... You are probably better-off investing the premium payment on something like LTC, or something else you might need.
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Re: Keeping Disability Insurance ?
Old 04-23-2007, 06:40 PM   #6
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Re: Keeping Disability Insurance ?

Quote:
it would be like paying for auto insurance when I no longer had a car
ditto
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Re: Keeping Disability Insurance ?
Old 04-23-2007, 06:59 PM   #7
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Re: Keeping Disability Insurance ?

Thanks. I figured that it was not needed if no income to replace but wanted to make sure others agreed.
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