Money Matters
vlagrl35
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
short term disability
Since I'm checking home insurance rates it got me thinking about short term disability rates. We've had a policy for a few years now on DH but it never hurts to look around. What provider do you have yours with if you buy it separately like we do?
Re: short term disability
Our LTD has a 6 month waiting period, but we have enough assets in Roth accounts to last a couple years without income. It wouldn't be ideal, but we could survive 6 months no problem, so we don't have a separate STD policy.
We use Guardian for our LTD. It's kind of pricey, but I did a lot of research on this before buying the policy, and they get excellent reviews. Our income is insured up to the legal limit, our policy is portable, and there is a COL adjustment plus retirement contribution protection as part of it.
I know you guys are self-employed, but for those who are not... when you buy your own disability policy that's unaffiliated with an employer, any money that pays out under the policy is tax-free. Whereas money paid out from a group disability policy provided through an employer is ordinary income. This reduces the net amount you can receive under the policy dramatically.
Something like 25-30% of all workers become permanently disabled before normal retirement age. And depending on the type of disability it can require a significant outlay of personal resources (more so even than premature death) since it may require long-term care. H and I figure that our most valuable asset is our ability to produce income, so it should be insured just like all of our other assets. At some point we will be self-insured for LTD too, but we aren't there yet.
FYI our LTD policies required a medical exam like you get for life insurance, and they did ask about pregnancy. I got this policy set up in the fall, when I could honestly say I wasn't pregnant. I suspect my rates would have been higher if I had been pregnant while going through the exam.
Once we are done having kids I will probably stop paying for the policy (that is our only way of paid maternity leave longer than 2 weeks). I work from home on a laptop so it would have to be a very serious illness/accident to make me incapable of doing my job. Plus we are somewhat self-insured since we can meet our obligations on DH's salary alone and we have a lot of money in ROTHs and non-retirement stocks that we can cash in if we absolutely need to.
Honestly if I were self employed and the breadwinner, I would, without a doubt, get long term disability insurance. You never know what can happen. My dad was working one day (self employed as a landscaper and also retail at a hardware store), and disabled the next, and then died 3 months later... at the age of 51/52. You can always apply for SSDI but that's a long process and could take longer than you have savings for, and that money isn't very much even when you do get it.
We don't have short term on either of us and only long term on my H. I work at a desk so it would take a lot for me to become permanently disabled. My H works in a factory and it's physical labor all day. Even just a sore back affects his work. So we took the plan his employer offers and have them take the premium out post-tax so the benefits wouldn't be taxed.
TTC since 1/13 DX:PCOS 5/13 (long, anovulatory cycles)
Clomid 50mg 9/13 = BFP! EDD 6/7/14 M/C 5w6d Found 11/4/13
1/14 PCOS / Gluten Free Diet to hopefully regulate my system.
Chemical Pregnancy 03/14
Surprise BFP 6/14, Beta #1: 126 Beta #2: 340 Stick baby, stick! EDD 2/17/15
Riley Elaine born 2/16/15
TTC 2.0 6/15
Chemical Pregnancy 9/15
Chemical Pregnancy 6/16
BFP 9/16 EDD 6/3/17
Beta #1: 145 Beta #2: 376 Beta #3: 2,225 Beta #4: 4,548
www.5yearstonever.blogspot.com
No, LTD doesn't kick in until 6 months.
It's most definitely a personal decision, but I'd personally prioritize LTD over short term. Just because STD stops paying out after only so many weeks (depending on plan). To where LTD doesn't stop paying out. With savings you can usually cushion to float for those 6 months, but if he were to be permanently disabled there would need to be a very substantial nest egg to be able to pull from to keep going financially.
TTC since 1/13 DX:PCOS 5/13 (long, anovulatory cycles)
Clomid 50mg 9/13 = BFP! EDD 6/7/14 M/C 5w6d Found 11/4/13
1/14 PCOS / Gluten Free Diet to hopefully regulate my system.
Chemical Pregnancy 03/14
Surprise BFP 6/14, Beta #1: 126 Beta #2: 340 Stick baby, stick! EDD 2/17/15
Riley Elaine born 2/16/15
TTC 2.0 6/15
Chemical Pregnancy 9/15
Chemical Pregnancy 6/16
BFP 9/16 EDD 6/3/17
Beta #1: 145 Beta #2: 376 Beta #3: 2,225 Beta #4: 4,548
www.5yearstonever.blogspot.com
Something to think about when looking at whether you want/need to get STD is how long you would need to pay your own expenses (if you don't have STD) before LTD kicks in. 60 days vs. 6 months could be a huge difference.
I have both STD and LTD provided by my employer.
Probably something I should look into if/when I become unemployed, but I've always assumed I'd be turned down because of my medical issues. Still, I guess it doesn't hurt to check.
Even UE, I do have a significant p/t job that isn't that physically demanding, but does require driving and frequently getting in/out of the car.
I've always wondered that also because I know it is based on income. Or if it works similarly for someone who is self employed.