The Millennial Insurance Almanac
As a young person, looking at all of the different kinds of insurance can be overwhelming. It can be difficult to determine which and how much insurance you actually need. It's also common to think a type of insurance isn't worth having or to think ‘that won't happen to me', but in reality if you're second guessing if insurance is worth it or not, you probably need it. It's important to make sure you, and your assets are covered by insurance. Health, car, and homeowner's insurance are some of the most common types of insurance, but that's only just the beginning.
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Everyone needs health insurance, but in 2018 27.5 million people did not have health insurance at some point during the year. Many people are able to obtain health insurance benefits through their job, but what happens if your job doesn't offer benefits? First, you need to determine what you want to cover. If you're income is too high for you to apply to Medicaid, shop around for different insurance companies. Different companies cover different needs; therefore it's important to look at a plan carefully to see what's covered. Cost is a big factor when determining which insurance is right for you, but just because a plan is cost effective doesn't mean it will cover what you need to be covered. Take your time to find a program that offers exactly what you need to ensure your health needs are secured.
As a millennial, or a gen z-er, you might soon find yourself in the position whereby you won't be covered under your parent's health insurance anymore. If it's okay with your parents, stay on their insurance until the latest moment you can. Even if you're paying your portion of the premium on their insurance, it's more affordable then getting your own plan. When you do finally have to get your own insurance, don't panic. If you know it's coming soon, start to alter your spending habits to make sure this new expense will fit in your budget. If you're going to be obtaining health insurance from your employer, money will be taken directly from your paycheck. Save some extra money a few months leading up to your first health insurance payment. Over time, you won't notice the money being deducted from your paycheck as much as when you first start paying your own insurance. If you're obtaining insurance on your own, still start saving a few months leading up to your plan starting. Be sure to research different companies to find the plan that's right for you.
Read More: Flexible Spending Accounts
Life insurance is a contract between an individual and an insurer where the insurer promises to pay a designated beneficiary a sum of money when the insured individual passes away. Deciding whether you need life insurance will differ from person to person depending on their life situation. If you're a single millennial without kids or many assets, you might not necessarily need life insurance. Although you might not need it, if you feel strongly about having it and are in a financial state to do so, then there's nothing stopping you from obtaining life insurance. If you are in a financial state to obtain life insurance, the younger you get life insurance the lower your premium will be. So, if you can afford it, it's worth it even if you don't have kids.
Read More: Life Insurance
If you have children or you're married, having life insurance will be extremely beneficial to your children or spouse if you should die. Having life insurance is a way of saving and investing. Although you won't be saving and investing in yourself, you will be for your dependents. Having life insurance is a scenario where you may think ‘this won't happen to me', but it's important to be prepared for the unexpected. Life insurance will be a financial security blanket for your dependents in case something happens to you.
Renter's Insurance is for when you're a tenant and don't own the property you're living in. This will cover all of the things you own inside your rental. If there's a natural disaster, fire, or robbery at your rental, your items will be protected if you have renter's insurance. Liability will also be covered under your insurance. For example, if you have a guest in your home who falls down your stairs, your insurance will cover that person's medical bills. Many rental properties and landlords require you to obtain renter's insurance, but if yours doesn't you should consider obtaining it on your own.
Renter's insurance is also super affordable and it's easy to obtain. Even if you don't think you have anything of value, if your rental is burglarized and everything is taken, having insurance will keep you covered. To find a company that offers renter's insurance, you can do an online search or if you own a car, your car insurance company probably also offers renter's insurance. Usually renter's insurance will only cost you around $15 a month, so it's affordable and worth it.
Owning a home is a huge financial step, and you want to make sure that your home is protected by homeowner's insurance. What does homeowner's insurance cover? This will vary from carrier to carrier, but generally covers different kinds of hazards. There are four major things homeowner's insurance typically covers. First, it covers your actual house, meaning the building you live in and any other structures on your property, such as your garage or a shed. Next, all of your assets inside your house will be covered up to a certain amount. Additional living expenses are also covered by your insurance. This means if there was some sort of damage to your home that made it so you couldn't live in it, your insurance would cover your living expenses of where you were staying up to a certain amount of time. Lastly, liability, if another person becomes injured on your property their medical bills will be covered.
Read More: Are You Ready To Purchase A Home?
Car insurance covers damage to your vehicle and protects you financially, if you're liable for someone else's injuries or damages. If you or your passenger is injured in an accident, auto insurance will cover the medical bills for that, or if you're injured by a driver without insurance. There are a plethora of different factors that go into the cost of car insurance. There are also so many different kinds of auto insurance that every company is offering something different as it can be regulated at a state level. There are factors that will affect your car insurance such as, your past driving record, the region you live in, marital status, and credit score. The type of car you drive will also always impact the cost of your auto insurance. Age of the driver is a part of your insurance cost as well. For millennials, who have been driving for some time, your rate will go down the more experienced you get.
Read More: Things To Consider Before Buying A Car
Your car insurance will also have a deductible, which is the amount you pay out of pocket before your insurer will cover your claim. The higher your deductible, the more of the repair or claim you'll have to take on. This means your out-of-pocket insurance rate could be lower, but you'll have a higher overall sum to pay if your car is damaged, and vice versa. Car Insurance is required in every state, except New Hampshire. If you're caught driving without insurance, you could get a fine, have your license taken away, or even go to jail. Therefore, car insurance is something you need, not only to protect yourself, but to also protect the other drivers on the road. Since there are so many car insurance companies, you'll want to shop around and research different options before selecting the company that's right for you.
Health, life, renter's, homeowner's, and car insurance are some of the most common insurance types that millennials need to obtain. If you own or rent anything else you think needs to be insured, you should obtain insurance for your items rather than thinking it's ‘not worth it.' Insurance can be complicated, but you can seek professional insurance help if you're not sure which insurance is a good fit for you. Having insurance not only protects you, but others around you. It's also okay to switch insurance companies. Over time, you might realize an insurance company isn't right for you anymore or you might find something more cost effective. One misconception about this is changing insurance companies will affect your credit score, and that's not true. Changing insurance companies will not affect your credit score. Insurance provides peace of mind and protection from financial loss, and it is so worth it.
Katherine Fatta is the Social Media and Content Specialist at Navicore Solutions. She creates fun and informative social media posts that engage the public. She’s also the host of Navicore’s podcast, ‘Millennial Debt Domination.’ You can listen to our podcast here.