Disability or Life Insurance?

*IF* I had to choose, and only one choice was allowed, I'd go with Disability.  Plain and simple, it covers the "here and now" (and even then, only a percentage) of my cost to *live*.

This said, I've got both.  I purchased a DI policy many years ago and still have it.  Regardless of my employment situation, I'll always have it. (as long I pay monthly premium).  With an eye to the future, I also purchased a LI policy many years ago.  I knew I wanted to get married and I knew I wanted to have a family - putting a LI policy in place in anticipation of same would guarantee wife and/or family would have *something* should I die.  It also mitigated the *possible* chance of being uninsurable (or perhaps insurable at a higher premium) by the time wife/family was in place.

Also, re: what type of LI?  I've got several term policies.  Two are level premium (20-yr, I believe) and the other has a gradually increasing rate based upon my age.

HTH

In all likelihood, DI... especially if no one depends on your income. There are a lot of people who carry life insurance that probably don't need it... semi-related question... why does your mom have life insurance? Does she need it?

If you have to pick one, I say play the percentages and go with DI.

I have both, myself.

edit: I have a 30-year term policy.  Hopefully in 30 years, hopefully sooner, we will be in a position that life insurance is not needed.

That's the thinking.  We'll see how it plays out in practice.  Need to cut down on tri gear.   

NewLeaf,
No, my mom doesn't need it.  She wants it because she sees it as a way to make sure her kids get something when she dies.  I have tried to talk her out of it, but no go.

when I got my LI policy, that's the way our guy explained it to us.  You start out with a good policy and then as your savings increases, your need for LI goes down.  So basically, you Savings Acct/Investments are your LI policy.

I'm not looking forward to seeing how my mom plans on covering her costs for the next month.  I've already ponied up her mortgage and HOA fees. 

In my mind the ONLY reason one needs life insurance is if one has financial dependents. And then only if ones total financial portfolio is not in itself adequate.

However, I think everyone can benefit from disability insurance. Your mom's situation is a good example of why.

Edited to add: Having said that, I pay for a 5x annual salary term LI plan through my employer, and I also pay for a disability plan (I think it pays like 60% of annual salary after you use up your sick leave.)

no doubt.  we are having our second baby this August, and have received solicitations for life insurance on the not-yet-born baby.  absolutely ridiculous.

Having sold insurance in a past life, I can at least  voice my opinion here.

Insurance is a neccessary evil. You only see the benefits if something bad happens to you.  Life insurance is there to protect your family in case you die and they are dependent on your income.  Otherwise it is a waste of your money.  Most adult family members (husband and wife) should be covered by some life insurance because if either died then the remainding members would suffer financially by the loss.  Grown children do not need to profit by the death of a parent.  Therefore, life insurance should be reduced as your children become more independent.  Believe me, there are much better ways to invest money to leave a legecy behind.

Disability insurance might seem great, but in reality rarely pays off.  The likelyhood of recieving a qualifying condition does not justify the high premiums.  And understand this, the insurance companies have a vested interest in getting you off the payments and structure the payout to encourage you to return to providing your own income.  When viewed from a risk/reward concept, the risk (years of premiums versus no income) fails to beat the reward (opportunity cost of premiums versus limited coverage)

My recommendation is to consider what you are trying to cover.  And then determine the cheapest way to cover it.

I'll disagree with the first bold statement because I agree with the second one. 

Insurance is just a means of managing risk.  Statistically speaking, it never pays off because the insurer expects some profit in the deal.  For most of us, a high probability-small loss (to insurance) is preferable to a rare-large loss (catastrophic fire). 

Term life insurance is relatively cheap for us "youngsters" because the odds of dying are pretty low.  Disability insurance is relatively expensive because the probability of suffering some disabling injury are 35-50%.   If the odds are this high, then the practical solution is to build a sufficient nest egg to protect against a short-term (several months) loss of income.  Not quite as nice as buying a CF bike, but hey, it sucks to grow up. 

As to the OP.  I have both term life and disability insurance as part of my benefits package from work. 

Bear in mind that 2 disability options are offered - short and long term disability. Your mom could have used her STD insurance for her current needs (if she had carried it), depending on the plan she bought into. Life insurance isn't going to help her pay her bills.

Back when I was married and trying to have kids, I had STD, LTD and term life insurance. The disability coverage was so that we wouldn't lose the house or cars if I couldn't work. The life insurance was so that my hubby and anticipated kids would have no debts and a free/clear home if I died (had key man insurance, so hubby would have won a small lotto on me). Now that I am single, my house is almost paid for and credit debt is well below $1,000, I don't worry about life insurance at all. I'll buy LTD once I start collecting fees with my new business.

Renee what is key man insurance?

That's something your employer takes out on you - both the company and my spouse would have been paid off if I died (I think my hubby would have received $3mil, if I recall correctly). Companies take out key man insurance policies on employees whose unexpected death would cause significant disruption to the business and revenues.

And then they pay a hitman 100k for a pro to murder you, leaving them 2.9 mill in the black.  Easy cash!