<<Should I cancel this disability policy in favor of retirement saving?>>

I've never found insurance of any kind to be anything other than a waste of premium money that's better spent being invested (and so building a self-insurance pile). Case in point: we paid for my wife's biopsy and then bilateral mastectomy out of our own pocket, and the total cost was less than the accumulated premiums would have been to obtain coverage for 80% of it.

I'd toss the disability insurance and invest the $400. The insurance company is making money on the premise that you'll remain healthy. They're the actuarial experts; I'd take their (implicit) advice. In general, if someone is willing to sell you insurance, it's a good bet you don't need it.

Hope this helps.

Eric Hines