Last Updated on January 11, 2021
Talking about insurance is never fun but there are some important things new college graduates need to know about.
After turning the page of college education (at last!) the last thing you would want to think about is insurance, but I need to tell you that it’s a necessary part of adulthood that you should start thinking about. And yes, the early twenties are the beginning of “adulting.”
Many young adults may not find the journey into “real life” entertaining, comfortable, or even interesting, but the first steps are always the hardest and it’s never easy to carry several responsibilities so suddenly.
So to excel at “adulting,” you need to learn how to manage your own money properly and to understand insurance.
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Insurance can protect you from financial disasters
Insurance is one of the weirdest investments; people pay for it but wish they’ll never need it. A young adult who’s just starting to walk towards their career may consider insurance to be a waste of money, yet, this investment might actually protect them against financial disasters until death.
According to a study from Harvard University, medical expenses causes about 62% of personal bankruptcies in the United States.
Moreover, it is estimated that ½ million American people file for bankruptcy in one year. In U.S. health care spending grew 4.6 percent in 2019 according to cms.gov.
Ideally, you should look for the least expensive insurance possible that will help protect you against risking your finances. Remember that insurance is an important investment when it comes to having a financially safe future.
Every young adult needs health insurance, even if they’re healthy
If you think that health insurance is too costly, think again because it can actually save you money. You need to know that health insurance serves as a discount program for medical services, so if you don’t have insurance, you’ll pay much more than those who have it.
Plus, if you can afford health insurance but decide not to purchase it, you’ll need to pay a government-mandated fee. The majority of insurance companies remove dependents from their parents’ policies as soon as they turn 26 years old.
At this age, the young adult can choose their employer’s insurance, pay an additional charge to remain on their parents’ insurance, or buy individual health insurance through their state’s health insurance marketplace or insurance companies.
The 2nd most important insurance for young adults is long-term disability insurance
Being an adult means having a full-time job, which also means you’ll need long-term disability insurance. If you get suddenly sick or injured and are unable to work for a certain period of time, this insurance will protect you from loss of income.
At the beginning of a career, young adults may not have succeeded to save much money yet, but they depend on their income both now and in the future. Therefore, long-term disability insurance is needed to help them protect their income as well as their future.
It’s important to note that many employers don’t offer long-term disability policies. You can purchase one via insurance companies.
Renters should consider buying insurance
As a young adult, you may have limited belongings but they still are important and valuable, thus need to be insured. One great way to protect all of your stuff from damage or theft whether they’re inside or outside your home is renters insurance.
When you decide to buy renters insurance, you should have your belongings and property appraised on a yearly basis in order to guarantee proper coverage. You can buy renters insurance through insurance companies.
Make sure your car insurance protects you and not just others
When it comes to car insurance, paying the minimum price available may seem like a great deal. However, you should keep in mind that car insurance is usually created to offer protection only to the other person involved in an accident and will not cover your damaged car or your broken bones, or worse.
So make sure to get a car insurance policy that is comprehensive and that will cover you, your vehicle, and anyone involved in case of a collision, and that you know what are the factors affecting your car insurance.
Insurance is no longer complicated when you get the right one for you. Just make sure to do your research and everything will be fine.
