Dying sucks.

Life insurance is arguably the most boring personal finance topic known to man. In fact, it’s so boring I’ve only talked about it once before. It’s time to try to make life insurance less miserable, and more tolerable. Are ya with me? (If you aren’t with me, this should be right up your alley).

Since Girl Ninja and I are both young, employed, and relatively healthy we have personally decided that life insurance is not at the top of our priority list. But just because we haven’t made it an uber-priority, that doesn’t mean we don’t have some protection.

Four years ago, when I started my first day of work, the human resources office shoved a bunch of paperwork my way. Without really knowing what I was doing, I ended up making some pretty responsible decisions. I began contributing 8% of my gross pay to my 401K and I signed up for not only the standard life insurance policy my agency offers, but also a little bit of additional life insurance coverage.

Ask me how much life insurance coverage I have? Wait, don’t ask me. I have no freakin’ clue what my coverage is. Ha! How’s that for staying on top of your finances? I’ve been paying for life insurance for the last four years and have no idea what I’m actually getting out of it. Let me go run the numbers.

………

Okay, I’m back. Apparently, if one of you crazy blog stalkers actually tracks me down and de-skins me, Girl Ninja will get a pay out to the tune of $162,000. Nobody tell her that, or I might end up missing tomorrow šŸ™‚

Since we have no dependents and no financial obligations, we don’t plan on beefing up our life insurance coverage in the near future. Once Girl Ninja turns into a baby factory though, it’s time to man up and protect our household (literally, since we will probably own a house by that time). It’s not like I’m familiar with
Insurance Jobs UK . Insurance confuses me šŸ™‚

We would likely go with a 20 year level term life insurance policy to cover myself (I don’t like whole life insurance at all). I’m thinking $1,000,000 to $2,000,000 in coverage should ensure my families well-being in the event I pay an early visit to the big man upstairs. A quick quote says a million dollar policy would cost us $35/month and a $2MM policy runs $66/month.

If I die while Girl Ninja is a stay at home mom, that puts a lot of stress on her. But if she has a few million in the bank she should easily be able to sustain the Ninja house until she finds herself a new suitor (this whole conversation is kind of morbid isn’t it?). I’d be a pretty happy person if I was able to still take care of my family even after I was gone.

We will likely take out a $500,000Ā  to $1,000,000 policy on GN. That way, if something happens to her, we can use this money to subsidize the new childcare expenses we’d incur as I continued to work.

Okay, enough about talking about hypothetical death. It’s depressing. BUT HOLY COW! A million dollar term policy is pretty stinkin’ cheap. I think I’m paying something like $22 a month for that $162,000 policy, so I should probably cancel it next open season and just buy my own million dollar policy for ten extra bucks. Time to quit being lazy, and start protecting my family.

Do you have life insurance on anyone in your household? If yes, how much. If no, why not?

If you like whole life insurance over term, tell me why.

Why is life insurance such an incredibly UN-sexy topic?

Am I a sucker?

Thank goodness the 24hr 39min drive is behind me. As you could see in yesterday’s post, I had a 16′ rental truck with a trailer behind it. I was pretty nervous before the trip as I’m use to driving a little two door couple, not a freakin’ semi. Since my driving record is mediocre at best, I decided to pay for a Budget Truck insurance policy

Here were the plans they offered…

I opted for Plan 1, the limited damage waiver. It set me back $100 and provided coverage for any physical damage to the truck, except the roof and tires. Since the truck is valued at $50,000, I figured $100 for ‘peace of mind’ was in order.

Tthe 1,300 mile trip is over and I’m happy to report the truck is still in one piece. That means Budget just made an easy $100 off me. Ninety-nine times out of a hundred, I’ll decline warranties and insurance plans on rentals/purchases, but I just didn’t want to be on the hook for $50K if something bad happened during the drive. I probably should have checked with my car insurance provider to see if my policy covers rental trucks (something tells me it doesn’t).

Would I pay for the coverage again? Probably. Would I hate every minute of it? You bet your booty I would. Unfortunately, peace of mind trumps my pocketbook in this scenario. Would you have paid the 100 bucks or risked it and declined coverage? When you rent a car do you get the insurance on it? If I declined and got in an accident, they’d sue me if I couldn’t pay the damages…right? Am I a sucker?

Are extended warranties worth it?

I’m writing this blog post on my three and a half year old laptop, listening to music on my two and a half year year old phone. Both devices are Apple products. Both devices had a warranty. Warranties that cost me a pretty penny ($160 for my laptop and $99 for the phone). I can’t help but feel like I got tricked out of $259. And thus begs the question: Are warranties really worth it?

I’m willing to bet all the money in my wallet ($7 at the moment) that the answer is, more often than not, HECK NO! Perhaps I should clarify, Standard Warranties = Good. “Extended” Warranties = Satan + Hitler – Brittany Spears. I can’t think of one time I’ve been able to collect on an extended warranty, not one. Here’s why…

Quality Matters:

Forums, customer review websites, Facebook, Google, etc have all helped give the consumer more power. Companies know if their product sucks, people will A) report them to the Better Business Bureau, B) create a Facebook fan page called “XYZ Company kills babies”, and C) buy something similar from a competitor. In fact, most companies are so confident in their product they often offer free warranties for a specified period of time. Most electronic devices are covered for 3-12 months. Cars anywhere from 30,000-100,000 miles. REI products are covered for life. All at no extra cost to you the consumer.

If it hasn’t broke, it probably wont:

Think about the last television you bought. It probably came with a standard warranty (something like 90 days), but you probably also had the option to buy an extended warranty (maybe 2 years). I’m guessing that the majority of TVs that survive 90 days, likely make it to the 2 year mark with no issue as well. Things typically don’t spontaneously combust. When you buy a warranty you’re betting the product will break. The company offering the warranty, however, is betting it wont.

Extended warranties generally don’t cover stupidity:

I’d be way more inclined to purchase an extended warranty if they covered things like stupidity. Unfortunately, most warranties don’t. Here’s what I mean. I paid $800 for my Macbook plus another $160 for Apple Care (meaning instead of only being covered for one year, my laptop was covered for three). My laptop made it through the first year just fine. Eighteen months in, however, clumsiness kicked in and my laptop fell off my bed, resulting in a small dent in the casing.

In the one second it took my laptop to go from bed to floor, I lost all $160 I invested in the extended warranty. Why? Because dropping my computer voided my warranty. Apple Care doesn’t cover stupidity. I started having hard drive issues a few months ago (over a year after I dropped it, so the Hard Drive issue wasn’t related to the drop) but Apple said that they would not replace my laptop as the dented frame voided the warranty. Bummer dude.

Insuring your phone, car, or laptop is all fine and dandy, until you do something that accidentally voids the warranty you already paid for. Don’t drop that phone. Don’t knock that computer against a counter. Don’t let someone drive their car in to yours. If you do, you’re likely up a creek without a paddle.

Companies aren’t stupid:

If the three previous points don’t have you convinced that extended warranties are the worst thing since Bristol Palin was on Dancing With The Stars, then this question will surely sway you… Do you really think businesses would offer a product that hurt them financially? Do you think Apple would sell AppleCare if they weren’t making ridiculous profits off it? Do you really think car dealerships would sell you extended warranties if they lost money on them? HECK NO TECHNO! Businesses are about making money, not losing it. They generally offer extended warranties for two reasons.

A) the amount they charge for a warranty, compared to the number of people eligible to claim benefits under the warranty, is in favor of offering the warranty. They probably sell hundreds, or thousands, of warranties for every one person that actually collects on it.

B) The warranty probably has a bunch of small typing that you didn’t bother to read. You might buy a warranty on your first house and be shocked to find out that things like the roof, water heater, electrical outlets, and air conditioning unit are not covered. Moral of the story kids, read that fine print before you sign anything! Unlimited warranties are harder to find than a sober person at ASU.

I’ve decided I’m done paying for any type of warranty in the future. Instead I’ll have so much freakin’ money in the bank, I’ll just self-insure. It will be psychologically difficult (since the warranties do provide a peace of mind), but I just have to remember the scoreboard; Warranties: 5, Ninja: 0.

How many things do you own right now that you paid for a warranty on? Have you collected on said warranty? Am I the only person that thinks warranties are, more often than not, a big fat waste of money?

Insurance agents don’t all suck

I’ve always put insurance agents in the same category as used car salesman. I thought they were all sleazy, creepy, pervy, slimy, (insert negative word here), and just downright awkward. Only selling products that are either overpriced or unnecessary. Turns out, they aren’t ALL as bad as I thought.

One of my wife’s friends (let’s call him Beavis) is an insurance agent. He’s been doing it for about three years now and seems to love it. I never talked much with him about it, though as I didn’t want him to try and sell me a bunch of crap I don’t need. Last month, my car insurance was up for renewal so I decided to shop around a little bit.

I also shot Beavis an email to see if he could get me a better rate (or better coverage for my money) then what I was quoted. I provided him pretty much all the same information I gave to each of the insurance agencies. He got right to it and two days later, I had an email from him with a quote that was $200/year cheaper than anything I could find for myself. Not only was the price/coverage stellar, but it was even with a large national agency, not some small random company!

Intrigued by this whole insurance agent gig, I shot him an email requesting quotes for term life insurance and disability insurance. Sure enough, he got back to me with quotes that were cheaper than, or as good as, what I could find.

Call me crazy, but I’m sold on the idea of going through Beavis for all my insurance needs from now on. I’m really glad/surprised he was, not only able to save me money, but totally changed my view of the insurance game. Don’t get me wrong though, I’m still convinced most agents are as crazy as this guy looks…


What’s your opinion on insurance agents? Have you considered using, or do you use one? Was I wrong to assume insurance agents are like those sleazy used car salespeople?

Have you ever judged an industry or profession before, only to be pleasantly surprised it’s not ALWAYS as bad as you thought it was?

I’ve dropped the insurance ball

life insurance

Marriage is an interesting dynamic. Gone are the days of staying up late while watching stupid YouTube videos, or eating spaghetti and a bowl of cereal for dinner. When I signed up for wedded bliss, I knew I’d be taking on some new responsibilities, one of which involves providing for Girl Ninja.

I’ve done a decent job tending to her short term needs. We have a fully funded emergency fund, health/dental insurance, and money saved for retirement. Ah yes, I can bask in my awesomeness, knowing I am a wonderful husband.

Oh wait, no I’m not. In fact, I’d say I’ve kind of sucked it up.

The majority of the ‘benefits’ I provide for our relationship are the direct result of me earning an income. But what if I die in a car accident tomorrow? What if I suffer a neck injury that paralyzes me from the waste down? I’ll tell ya what happens, Girl Ninja would be left in a very scary/vulnerable place. What kind of husband am I for not taking the necessary precautions to ensure my wife is cared for in all circumstances? (answer: a very crappy husband)

When I got my job back in ’07 I remember being shoved a whole bunch of HR paperwork. This is when I unintentionally made one of the best decisions of my life and began contributing to my 401K. I also decided to sign up for life insurance since it was so stinkin’ cheap. For like $2/month I could get a $10,000 life insurance policy. I figured signing up would be worth my while, so Mom and Dad Ninja would not have to pay for my funeral costs if I died (they were my beneficiaries).

The insurance I bought back then was sufficient for ’07 Ninja, but it’s not at all sufficient for 2010 Ninja. I need to pick up a good term life insurance policy that will pay out between $500,000 to $1,000,000 in the case that I die. Girl Ninja could then invest this lump sum, and ideally live on the interest earned, effectively replacing my income for life. Wanna know how much a $750,000 life insurance policy would cost me? About thirty bucks a month. That’s less than I spend on burritos, so I have no excuse for not stepping up to the plate and getting a good 20 year term policy.

Everyone knows what life insurance is. We hear about it all the time, but it’s rare that I hear a 20-something talk about disability insurance. After all, we are invincible right? Ha! Dave Ramsey says this about disability insurance “it protects your greatest asset ā€” your income! It is a crucial part of any financial plan since it helps you pay your bills if you are unable to work due to injury or illness. It is just as important to have as life insurance” That’s right. Just getting life insurance is not enough. I need to protect my income in the case that I can no longer work. Disability insurance comes in all shapes and sizes, but a healthy 20-something should expect to pay between $30-$50/month for it (depending on how much you make, where you live, etc).

When I asked Girl Ninja’s dad for permission to marry his daughter, it also meant I was asking for permission to take care of her. I’ve kinda failed at that, and it’s time to do something about it. It’s time to get insured!

Do you have enough life insurance to replace your spouses income indefinitely? Am I the only one that has dropped the ball when it comes to disability insurance? Are there any other types of policies I need to know about and look in to?

p.s. I hate (and by hate, I mean I’m jealous of ) you single folks since pretty much nothing in this article applies to you šŸ™‚