How Much Do We Spend On Insurance as a Family of Three?

“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.

  1. We want to confirm we are adequately covered.  Protecting our current assets is part of a responsible financial plan.
  2. We want to know if we are overpaying in an area we should take action on.
  3. 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?
  4. 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

Final Thoughts

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?

8 Replies to “How Much Do We Spend On Insurance as a Family of Three?”

  1. These are pretty competitive rates. BTW, I love your images on your blog. Do you draw them? Or do you pay an artist? Or something else? Either way I always recognize your posts by the images

  2. Thanks Deanna! It’s good to know these rates are competitive.
    Since I’m history focused, I use images from the British Library – and because the images are over 70 years old – they are in the public domain and free! It’s been fun to look through them and choose them for the blog.

    I wish I drew them myself, but then I probably wouldn’t have time for a blog…

  3. I would love to spend only $4,600 on insurance. In 2018 our health insurance premiums, dental premiums, auto insurance, and homeowner’s insurance was roughly double that amount. I am not in a HDHP because although I would save on the premiums, I would spend way more in total because I would hit my out of pocket max.

    It is good that you are paying attention to your health insurance numbers. I feel like a lot of people just ignore them since they are deducted from their paychecks. But they are still costs we pay (except for the lucky instance where the employer pays it all!).

    1. I can see how that would happen. When my husband was employed with a smaller company, he had to buy his health insurance on the market and it was at least $3,500 a year just for him.

      You are right. We are lucky with our current numbers.

  4. Alas, $2,000 isn’t really considered a high deductible anymore. It’s insane, admittedly, but there it is. These days “high deductible” means $5,000+ and isn’t that uncommon. Sigh.

    I’m waiting to see what my super fun car insurance number will be for the year because I was in an accident in December *and* this year I won’t get the benefit of a reduction for being married. So I’m socking away extra money ever since the accident in order to prepare myself for a hike in premium. I’ll probably shop around on insurance just to make sure I can get the best deal. But having just been in an accident, I’m not too optimistic that I’ll get a great rate. At some point, I need to investigate when I should drop comprehensive coverage and just go with collision. That’ll save me a fair amount of money.

    1. You are right about $2,000 not being a high deductible anymore. I think my husband’s insurance before this was $6,000!

      Best wishes with the car situation Abigail. I think you have described the worst part about insurance – they seem to punish you if you use it (when it comes to home and auto). I wonder how far gone our cars will have to be before drop comprehensive coverage? We certainly won’t do it now, but since we live close to work now we plan to keep these cars for a decade…

  5. Great post!

    I actually went out and passed all of the insurance licensing exams last year, for P&C, life, and health. It was a really great experience and I learned a lot about how insurance really works from multiple perspectives.

    Would it be worth our time to switch to different companies or drop a little coverage?

    Maybe. You could likely invest a small amount of time to just find out. Most people should review their insurance policies (including price shopping) every year in my opinion.

    1. Thanks for stopping by the blog Nate! Glad you enjoyed the post. I should invest a little time especially once our roof is done this fall. Congrats on passing all your exams.

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