“Blog posts about an anonymous family’s insurance costs are great click-bate!” said no one ever.
In other words, I probably looked forward to writing this less than you look forward to reading it.
But here we are.
You and me. AND IT’S IMPORTANT.
Conducting a cost breakdown in a certain area of our life can be an eye-opening experience. For example, we learned a lot when we figured out how much our mortgage-free home still costs us each year.
Now we’re on a mission to wrap our heads around our insurance situation.
We want to do this for a couple of reasons.
- We want to confirm we are adequately covered. Protecting our current assets is part of a responsible financial plan.
- We want to know if we are overpaying in an area we should take action on.
- As I consider a year-long sabbatical in the next few years, we want to understand the true financial benefits currently offered by my employer. What does it look like when those benefits are shifted to my husband’s employer?
- We need to answer an important question - What will our costs look like if we add baby number two?
The Cost Breakdown
Home Insurance: $685
This will go up once we add a new roof next summer.
Car Insurance: $1,181
Considering we can both see our place of work from our living room window (and we only put 5,000 miles or less on our Subaru's each year), I think we should shop around and look for new coverage in this area.
However, we are waiting until we have a new roof and can move to policies that bundle both home and auto for savings. Right now, very few insurance agencies will take us with a 20-year-old roof.
*To this policy's credit, we actually get a percentage back each year with this plan when we don’t use it. It’s basically a $100 check of our own money. We like to be hard on ourselves when it comes to numbers though, so we won’t factor this in.
Life Insurance for my husband ($250,000 worth of coverage): $252.50
Life Insurance for me ($250,000 worth of coverage): $207.50
We are health conscious people who walk every day. In order to obtain cheaper life insurance as people with a healthy lifestyle, I have heard about fit-bit trackers you can wear with certain policies.
However, I don’t know if the amount we would save would be worth the paperwork of switching? I’ll save that research for a very ambitious day...
The Expenses Below Involve Our Employers
Teacher Insurance: $240
Dental Insurance: $75 per month ($900)
I used to pay $43 a month for two free preventative cleanings a year as a single person. However, I’ve recently spent some ultra-smiley time looking into my husband’s family plan vs. my family plan since our little one has 8 teeth (soon to be 9).
My family plan would be $116 a month if we went with it and no deductible for preventative care. Even with a $90 deductible on his plan, we will still come out ahead (so that is what we are all going with instead).
Health Insurance (Employee + 1 Coverage): $200/month ($2,400)
This is “technically” worth $952 a month, but the employer helps out A LOT. It’s a high deductible plan ($2,700 each) that includes our son as the “+1.” It also has an employer HSA contribution of $1,000 per year.
Surprisingly, if we have another child (and/or I take a year off), we would move to the Family Plan that is $27 more per month than this. In this area, I was surprised by the low impact on our finances if I take a sabbatical or we have another child.
My Health Insurance: "$0"
It is worth $559 per month but I get it through my employer (as in, it doesn’t come out of my check). In addition, $648 goes into an HSA each year.
Life Insurance: "$0"
We both have a $60,000 policy provided for free.
Disability Insurance: "$0"
We both have a policy worth 60% of our pay.
*Adam used to buy disability insurance on the side for $32/month. Now he has it through an employer. If I were to take a sabbatical, I am unsure whether I would obtain it for myself or not. That would be worth considering.
Grand Total Per Year: $4,866
Understanding these costs (especially which costs are fixed, which are likely to go up, and which we could potentially save on), is important as we project ahead to retirement, mini-retirement, sabbatical, or otherwise.
What about you? Do you know your ultra-fun insurance number? Do you notice any areas where we could maximize? Would it be worth our time to switch to different companies or drop a little coverage?