A couple of weeks ago I wrote about how my husband and I have four or five different kinds of insurance and still feel underinsured.

We have health, dental, car, property and life insurance. If you count the homeowner's insurance that we pay for through our homeowner's association fees, we actually have six different types of insurance. Six kinds of insurance for healthy, 30-somethings with no dependents, except a dog.

I've read enough personal-finance books to know that any expert would tell us we're missing one big one, possibly the biggest: disability insurance.

In fact, insurance and financial experts say I'm more likely to suffer a disabling injury than die prematurely. According to the Social Security Administration's disability guide, a 20-year-old has a three in 10 chance of becoming disabled before reaching retirement age.

I can understand that feeling. I really love to buy the insurances that cover things that I feel confident are going to break. I buy the extended warranty insurance packages for computers, for fridges with motors, dishwashers etc. Things that have a much better chance of breaking down.

I didn't buy the extended warranty for the new stove we bought because, I've never seen a stove break before. I have seen fridges break down and computers have problems etc.

I have more than adequate insurance for the family vehicles. I've been in and heard of enough accidents to know that they're going to happen. Also, I always purchase the extended warranty for car maintenance. I've owned expensive cars and even they have mechanical problems. The insurance for these products offer more instant gratification. I know I'm going to get some value out of them.

Life insurance is a lot different because you're betting against your life and your spouses life.

The only gratification you'll receive from receiving money based on the loss of a spouse / income earner is the comfort of knowing that you'll be safe financially throughout the grieving period.

The stress of the grieving process coupled with trying to pay debts and bills is more than anybody should have to go through.

The way I look at life insurance is a little bit of investment to help out in a potentially catastrophic / inevitable event.

Articles from March 2006
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