Life/Disability/Critical Illness Insurance

[sabad66]

So I have pretty decent coverage for life/accident/illness coverage through work (I maxed out the additional coverage on top of the basic coverage), but i'm now thinking that I should get some coverage independent from work in case I get laid off/change jobs/whatever.

Any suggestions on a good broker for these types of things? Thoughts on term life vs. whole life, and whether any of the other types of insurance products (disability/critical illness/major accident)?

[ExtraSlow]

There are several threads on life insurance, do a search, there is some good analysis.
My thoughts on this are summerd up in these two posts:

Originally posted by CokerRat
I'll admit I don't "get" the value in universal or wholelife or similar policies. Maybe I'm stupid, or maybe I just understand that there is no free lunch.

I buy insurance, of any sort, to mitigate a catastrophic risk. . . . . . . .
I really struggle to imagine paying for insurance my whole life knowing I'd have FAR more at the end had I just socked it away in an investment. The truth is I will only need insurance for roughly 15-20 years of my life. Outside of that, I have no interest in paying a company money every year just for them to give me a fraction of that invested value when I do die.

Originally posted by ExtraSlow

This is exactly my situation. Today, if i die, my wife will be able to pay off the mortgage, take a year off work, pay for two kids to go to a good college, and have enough to pay for a rock band at my funeral. I suspect for many of the young families in Calgary, that need totals out to nearly a million bucks.
In ten years, my need for insurance will be much lower, as I will owe a lot less on the house, I'll have socked away some money for the kids education, and the wife will have to support the kids for fewer years. I don't see the point in an insurance policy that becomes MORE valuable over time.

Maybe I'm simple minded, but for me, the "value" of an insurance policy is in paying a fixed premium for a fixed benefit that is large enough to provide for my dependents. I invest in other ways.


As for critical illness insurance, that's got some solid value, because many serious medical conditions are actually much more expensive than someone dying. I don't know nearly as much about this type of insurance.

[Sugarphreak]

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[Masked Bandit]

skandalouz_08 deals in this stuff and is better than most at it. Give him a shout.

[Xtrema]

tldr, term, forgot whole life.

Cover your liabilities to your dependents. Mortgage, schools, living expense etc.

You can also buy some disability/life insurance attached to your mortgage. Although I have not figure out the plus and minus of such plan compared to independent plans.

[H4LFY2nR]

^my understanding is that when it's attached through your mortgage they will pay out the mortgage first. A separate policy will pay your estate/beneficiaries, allowing them a little more control over paying creditors.

sabad, I got an independent term life policy outside of maxing out my work coverage. While you're young and healthy, locking into a rate for ~10yrs is cheap enough I thought why not.

For critical illness the premiums can be a lot more depending on your health, family history, and the coverage you want. I went with a policy that pays back all premiums at age 70 as long as I've kept the policy active the whole time. So the cost is "only" lost interest and inflation.

Without trying to fear monger, I know of a few people who've been diagnosed with illnesses that would have qualified for a claim, one I know personally who was diagnosed with lymphoma at age 30. My personal feeling is there's a significant enough probability that I'd make a critical illness claim by age 70 that I might as well pay to play that lottery. Of course I hope that I never win it!

Shop around and work with the insurance agents to find the right balance between premiums and payout to suit your comfort zone. Also, consider if they underwrite the policy/guarantee payment up front, usually requiring your medical history and physical exam (that goes for term life too). I've heard horror stories about how some insurers only dig into your medical history after a claim is made, and then they try extra hard to find a way to deny coverage. They tend to be cheaper due to the lower underwriting overhead, and what I'm assuming is lower probability of payouts. I'm now wary of insurers that don't underwrite based on a medical (including the provider my employer's coverage is through).

FYI, I went with Shaganappi Insurance (Co-operators).