I have a history of serious health problems over the last ten years, though I'm fairly healthy now. Makes disability insurance seem like a no-brainer, except for the fact that I decimated my retirement savings during the years I was ill. So, do I use the money to build up my retirement funds, or do I go ahead and buy the insurance?

I don't know that there's a right answer. Most of the money would have to come from what I'm now putting into retirement savings. I make a good living, but don't have an extra $300 sitting around each month for insurance.

If you were in my situation, what do you think you'd do?

It's a real gamble. My dad died young, was cared for at home by my mom--no real expense there. My mother just died this past November at age 85--she was at Thanksgiving dinner with us one night, and gone the next. Long term disability? Nope--she was still living independently in her own apartment. Now, note that in her 40's she had a number of health issues--anyone guessing would probably have figured that she'd either have died early, or have been disabled for a long time, and needed a lot of care in later years. Fact is, other than her regular check ups, visits to the podiatrist to care for her feet, and having her cataracts operated on, Mom hadn't had any serious medical treatment for over 20 years when she died.

My father-in-law went very quickly, too--at age 82. He was still working as a plumber in November, spent a couple of months in the hospital, then died the beg. of February.

I'm not saying you should or shouldn't get the insurance--only you can decide if it's right for you. But to my way of thinking, I don't see all that many people in my life who actually need longterm care. Most seem to either go quickly, or be able to manage their needs anyway.

And the insurance companies are banking on the fact that their scare tactics will get lots of people to sign up--many who will never make a claim. For example, I've got an aunt who has had earthquake insurance for many years--no matter to her that we live in an area of the country that has never had a major earthquake in anyone living's memory. But they were more than happy to sell her a policy. I think she also has flood insurance--but she lives on the 6th floor of an apartment building. We also don't get floods of any size around here. That would have to be some departure from the norm for her to collect!

And what about the safety of investing in an insurance company? What if the company goes out of business in years to come? Or waht if the funds are mismanaged or depleted by embezzlement. There is a huge scandal in the country right now regarding pre-paid funerals. People paid ahead to make sure their wishes would be taken care of, and many of the funeral homes have stolen those funds and families are having to come up with money to pay the cost of a funeral twice--the second time at a much higher price.

Personally (and I'm not telling you what to do)--I prefer to save and control my own money. I'm not a fan of allowing others to take my funds--as in prepaid funerals, extra insurance, IRA's, etc. I do have one small SEP account, but only because I had a year where I needed some serious deductions, and that one was a reasonable way of keeping a few more of my own dollars. It's important to me to have the freedom to invest as I choose, and to move my money from here to there, depending upon what the economy is doing. I've just known too many people who have relied on others to nurture their savings, and lost everything. My sister is a case in point--worked for over 30 years for one company, was up in corporate management when the company was sold and dessimated by a larger one. She had a GOOD pension plan--but the funds were stolen by the new management, and when the company folded, she got a measely, one-time payout of $16,000!

When I worked for an independent CFP and used to pull insurance quotes for our clients, 50% of them did not qualify for an affordable rate. It's one of those maxims: by the time you want it and can afford it, you're too impaired to qualify for the best rates.

No one can decide for you how much risk alleviation you are willing to pay for. Unlike azzalea, we have substantial level term life insurance and comprehensive LTC policies on both DH and myself - but no disability insurance. This fits our budget, our needs, and takes into account our health both current and future, and our overall estate planning decisions.

The fact is, if you don't take the usual preventive prescriptive medications, such as statins, BP medications, etc. - yes, you are likely to kick off quickly and suddenly. It just happened to my mother, in fact.

But if you are like many Americans today - including my MIL, and myself and DH - and are on these types of medications, you are likely to live a lot longer, even WITH a serious illness. In 1969 my stepfather died unexpectedly of a massive heart attack. By the late 1980's, when my FIL and step-FIL both suffered the same kind of massive coronary, they lived another 12 and 15 years, respectively. Between bypasses, angioplasties, and medications, both men survived to lead relatively normal, if mildly disabled lives, for over a decade.

Unlike some, we have seen many elderly people we know "hang on" for many, many months and die very slowly. So for us, having LTC insurance is a useful peace of mind because it protects the estate for the survivor; otherwise, there'd likely be too little left within a short time.

For us, however, it's easier to make insurance decisions because we have adequate savings (not great, but sufficient) and my DH will receive a full pension with retirements health benefits - very rare in today's world. I'd have to say if I were in your shoes I'd probably opt for as much retirement savings as possible.

Assuming you became disabled enough to meet the Social Security requirement of 3 ADLs (Activities of Daily Living), would the disability insurance policy still pay the stated amount, or would it reduce the benefit paid by taking into account the SS money?

Did you actually fill out a pre-qualifying application, or just get a simple price quote? It may be a moot decision, if you don't actually qualify for either one.

I retired at 55 with health benefits and a pension - took the pension short as I peferred taking less for longer. I'd maxed my 401k with employer match since it was initially offered to us in the early 80's, lived within my means, carried zero debt save for a mortgage. Having been diagnosed with Rheumatoid Arthritis in 1990, I geared my efforts toward anticipating at some future date I'll most likely require some kind of additional help - in home assistance, assisted living arrangements... who can say? So, I've yet to consider when to start drawing Social Security or to start drawing on my 401k. A few financial windfalls have been thrown into the mix too so I feel quite secure. With no heirs or survivors to protect financially, etc., my estate is for my own maintenance. But that's neither here nor there.

But, even if I were still actively employed, I'd feel much more comfortable relying on my own devices than hedging my bet paying monthly insurance premiums for which I may possibly get no return, or perhaps less of a return than anticipated. I, too, would opt for saving as much as you can in any way you can.

Like the rest of you, my gut reaction is to not get the insurance and save more towards retirement, so that's what I'm going to do. I'll feel better with money in the bank than in my insurance company's pockets.