Double Income, No Kids: An Insurance Case Study
Sam and Sarah are in their 30s and are both working. Sam makes $70,000 per year and Sarah makes $90,000 per year. They don’t currently have children, but they want to buy a home and start a family. They have saved $50,000 for a down payment. They are renting an apartment while they look for their first home. They have average living expenses and try to save as much money as possible.
What happens if Sam and Sarah don’t have insurance?
Sarah is one of the 40% of people that develop cancer at some point in their lives. She is diagnosed with breast cancer and undergoes surgery and a 6 month round of chemotherapy. Sarah is unable to work during this time and the cost of treatment is considerable. Sarah makes a complete recovery and goes into remission, but she’s concerned that the cancer will return. Unfortunately, the costs of cancer care wipe out Sarah and Sam’s down payment fund. In addition, Sarah’s doctors recommend that she try to have a child as soon as possible. It’ll be hard for Sam and Sarah to save for another down payment if they have a child on the way and are on one income.
What insurance could Sam and Sarah have taken out?
Protecting Your Paycheck
Sam and Sarah could have purchased cancer care insurance. As the name suggests, it can help cover the costs associated with the diagnosis and treatment of cancer and other dread diseases. All benefits are paid directly to the policyholder, are tax-free, and can be used however they see fit.
Sam and Sarah would be able to use payments to maintain their quality of life or pay for expenses that their insurance won’t cover, such as experimental treatments, transportation costs to and from the hospital, lodging, and more. A cancer care policy also has coverage for breast reconstruction and experimental treatments. In addition to cancer, it also covers other dread diseases such as lupus, multiple sclerosis, and tuberculosis.
Sam and Sarah could also have taken out supplemental hospital indemnity insurance. Hospital indemnity insurance pays a fixed sum per time period while the policyholder is staying in the hospital. This would have been useful due to the prolonged time frame of Sarah’s hospital stay.
Since both incomes are vital for Sam and Sarah to achieve their goals, both incomes should be protected. Sam and Sarah can both take out short-term disability insurance to protect them against temporary setbacks. Even though they have substantial savings, a loss of income could mean a delay in their dream of home ownership.
Protecting Your Life
Sam and Sarah could have taken out life insurance policies so that if one of them passed away, their partner could still realize their dream of home ownership. Sam and Sarah were planning on taking out a mortgage of $500,000. If they were insured for this amount, the surviving partner would be able to purchase a home while they continued to work themselves.
What happens if Sam and Sarah had insurance?
Sarah was unable to work while having surgery and being treated for breast cancer. Her short-term disability policy was able to offset the loss of her income after the initial waiting period. These payments allowed Sam and Sarah to continue to save while maintaining their standard of living.
Additionally, Sarah also received benefits from her hospital indemnity plan and her cancer care plan. These payments allowed Sam to take unpaid time off work to help Sarah recover and helped cover out-of-pocket medical bills. Additionally, Sarah was able to explore experimental treatment options without financial stress.
Thankfully, life insurance wasn’t required in this instance. However, if Sarah and Sam had waited to take out life insurance until after her diagnosis, they may have found that Sarah was no longer insurable. Obtaining life insurance while both partners are healthy is an important step in financial security.
Are You Married Without Children?
Your situation may be like Sam and Sarah’s, or it may be wildly different. Either way, United Benefits Specialists can help you find the best coverage solutions for your family’s specific needs. Get in touch for a free one-on-one consultation.