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I left my job last spring. When I did this I also left my company provided insurance. My family had to figure out how to pay for health, dental, eye, and life insurance without the help of my previous employer. While figuring out how much it would cost to replace our previous policies with new ones, I quickly came to the conclusion that my company had generously provided my family with near- Cadillac level health and dental plans. I also quickly figured out that my family could not afford to keep them. So we shopped around, played with deductible amounts and, in the case of life insurance, even drastically changed our strategy. We ended up with a suite of individually purchased insurance rates that cost roughly $50 more than what I paid as an employee who received insurance benefits. Here is how we did it.
- Health insurance was heavily subsidized by my employer. Our $20 per office visit, $50 per hospital stay plan cost us $270 a month. The equivalent plan as an individual family would have cost $1300 a month. We turned to a $7,500 maximum family deductible HSA plan that costs us $320 a month. Thus our monthly health insurance cost increased by $50.
- Dental insurance with a $1,000 individual deductible through my employer cost us $60 a month. We found a $1,500 individual deductible dental plan for $80 a month and we didn't have to change dentist. The cost of an individual family dental plan was thus increased by $20 per month.
- Eye insurance was provided to my family for $18 a month through my employer. Through COBRA , it costs us $22 a month. (This was the only insurance plan that made sense to purchase through COBRA. Our health and dental insurance costs would have nearly tripled and COBRA didn't offer us life insurance.) Our eye insurance only increased by $4 a month.
Life insurance was nearly free from my employer. I paid $2 a month for a $50,000 term life policy. While working for my employer I had supplemented this policy with a $50,000 universal life policy that cost $48 a month. Thus my monthly life insurance bill was $50 and my family was covered to a total of $100,000. When I left my job I canceled my universal life policy and replaced it with a $150,000 term life policy that cost only $23 a month. Thus the change to term life saved my family $27 a month.
While having to purchase individual health, dental, and eye insurance increased our monthly insurance costs by $74 a month, changing from a Universal Life policy to a Term Life policy saved us $27 a month. Thus our monthly insurance costs increased by $47 when I left my job.