Behavioral Economics: What’s Your Diagnosis?


Check out’s article “The 7 Money Mistakes to Avoid.”

Which financial mistakes have you made? I think I’m most guilty of the following:

 #1 — Saving with the right hand and spending with the left
#3 — Looking into a cloudy crystal ball
This mistake is all about underestimating risk. I think of myself is very risk adverse but this article mentions how many people underestimate the need for disability insurance. Should I have disability insurance? I don’t know anything about that….I pay for my own life insurance but I always assumed that if I became disabled my company’s insurance would kick in and cover me. I’m going to have to check on this. 

I looked up “disability insurance” and found the following article:

The article shares the following info:

Five states require employers to provide short-term disability. Hawaii, New Jersey, New York, and Rhode Island mandate most employers provide 26 weeks of coverage. In California, employers are obligated to offer 52 weeks.Long-term disability insurance kicks in once your short-term disability benefits run out. Unfortunately, there are no state laws that require employers to provide long-term disability, but it’s estimated that half of all midsized to large firms do provide at least some insurance.If you do decide to buy an individual long-term disability plan or to supplement your employer-based insurance, be sure to find out how much short-term disability coverage you have. There’s no reason to pay a premium for a long-term disability policy with a short elimination period of, say, 60 days when you have short-term coverage for six months.

The article which was published in 2005 then goes on to say:

How much does coverage cost? Here’s one example from MetLife: A 40-year-old male non-smoking business executive would pay $1,150 in annual premiums for $3,500 per month in benefits delivered up to age 65 with a 90-day waiting period.

More articles/resources:


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