Austin R. Powell

In order to set up a group health insurance policy, most companies require a minimum of 2-3 employees; however, in a very small group with young and relatively healthy people, it could be much more cost effective to purchase individual policies. The downside there is that everyone must qualify medically.

I’m going to have to disagree with Dennis…I have many clients who buy small ($10-25k) Whole Life policies on their children for two main reasons:

1.) They don’t have extra money to cover burial expenses or time off from work.

2.) The child riders typically cost $5-10 per month to add to a term policy; $10k WL policy on a 7 year old, for example, costs $6 per month and it lasts forever and builds a small cash value, the rider will fall off at some point.

The only time a child rider is a better option is when families have multiple children because you only pay for one child rider for usually up to 10 children.

A good rule of thumb is 1-3% of your income. Example:

Annual Salary: $100k; $50k

Monthly Disability Benefit: $5-6k; $2500-3k

Annual Premium: $1-3k; $500-1500

The premium should be in that range assuming you are the typical age for purchasing DI coverage (25-45) and are getting a standard policy. Obviously, the premium can fluctuate depending on the additonal features you add to the policy and if you are slightly older.