Life is full of surprises, and many of them can be quite expensive.
Imagine yourself unexpectedly ill and in the hospital. Or your precious laptop is stolen from your car. Even worse, imagine if there is a sudden death in the family and aside from the tragic circumstances, there’s uncertainty how income will be replaced.
What do these situations have in common? Insurance can help alleviate the financial costs of these cases and make them easier to get through. But you still may be wondering: “Do I need insurance?”
Many of us are dealing with student loan debt repayment and are focusing on other financial priorities, so insurance often falls to the bottom of the list.
When you are young, it’s easy to dismiss the importance of insurance and think, “that won’t happen to me!”
But things do and will happen. Will you be financially prepared to deal with the ramifications? One minor slip up can derail your student loan repayment or savings goals.
Check out these three types of insurance that can help protect you and your financial future.
Just a few years ago, I was working part-time, so I was not eligible for my employer’s health insurance. I was too old to be on my parents’ health insurance, so I had to make a choice: Do I buy my own health insurance or not?
At the time, I wasn’t making very much money, and I was focused on repaying my student loans. So I opted not to buy health insurance.
For two years, I carefully navigated life without the safety net of health insurance. But one surprise incident put me into the hospital.
The bill? Over $1,000 dollars.
When this happened, I was mad at myself for thinking that I could stay in good health without ever having to spend a dime on healthcare costs.
Things have changed drastically since I went without health insurance a few years ago. Now healthcare is (hopefully) more affordable for those who couldn’t afford it before thanks to the Affordable Care Act.
Even with sweeping changes to the healthcare system, there will still be some people that go uninsured — by choice.
If you are wavering on getting health insurance, consider the costs of:
- A doctor’s appointment
- An emergency room visit
Having health insurance can give you peace of mind and lower your out-of-pocket costs when you need care. I’m still shocked about how much I pay for things with insurance, but when I see the full costs for appointments and medications, I’m grateful I have it.
If you don’t have health insurance, you might be self-employed or working part-time. If you are curious and thinking “do I need insurance?” ask yourself if you can afford a health emergency.
There may be lower-cost options if you need to buy health insurance yourself. You can browse plans on browse plans on eHealthInsurance to get an idea of what the monthly costs of purchasing your own insurance are.
When we are healthy, it’s easy to think that we are young and invincible, and health insurance is just another added cost. But one unexpected illness can put you in a financial rut.
Another important type of insurance to consider is renter’s insurance. Having renter’s insurance can protect you and your belongings in a variety of situations.
If there is an unexpected leak or fire in your apartment building and your stuff gets ruined, renter’s insurance can help cover the costs of your belongings. Don’t expect your landlord or your apartment complex’s insurance to cover your belongings in such a situation.
Aside from this case, there are some pretty unique things that renter’s insurance covers.
- It typically covers the costs of stolen items both inside and outside of your apartment. So if your laptop is stolen from your car, your renter’s insurance could help cover the cash value of the computer to get a new one.
- Most renter’s insurance policies come with some form of personal liability. So if you are hosting a party and someone gets hurt in your apartment, your personal liability may be waived up to your coverage amount. The renter’s insurance could help cover any associated medical costs if you were found at fault, or if you are sued.
I know all this because I recently got on the renter’s insurance train after hearing about my friend’s laptop being stolen. The first question everyone asked her was, “Do you have renter’s insurance?” She didn’t.
Since I make my living from my computer, I’d be hard pressed to find the cash to cover everything.
It seems that my friend and I were not alone either. According to a recent poll from the Insurance Information Institute, 95 percent of homeowners said they had homeowner’s insurance while a mere 37 percent of renters said they had renter’s insurance.
The surprising thing is that renter’s insurance is amazingly cheap compared to what it covers. You can generally find renter’s insurance rates between $10-$20 per month! Liberty Mutual offers renters insurance for “pennies a day.” The total cost of my renter’s insurance for one year was $167 — and that is $167 for my peace of mind.
Renter’s insurance is a good option for most people as it covers things your landlord won’t and often covers your belongings inside and outside of your home.
As a young adult, blooming into full-fledged adulthood, you start to take on more responsibilities. Maybe you pursue homeownership, get married, or start a family. All of these life changes dramatically shift your financial situation as well as your financial responsibility.
If you have kids and/or have one partner that relies on your income, getting a life insurance policy can protect your family and their financial future should something happen to you.
Yeah, death is never a fun topic to talk about. But money and death? Even less fun.
In case of death, a life insurance policy will pay out a lump sum to your beneficiaries, such as your family, to help cover associated costs and recoup the loss of income.
If you are single, in a relationship, or married with no kids, a life insurance policy might not be necessary.
But life insurance is often recommended if one person relies on the other financially. If you have questions, it never hurts to speak to a professional.
I used to think, “Do I need insurance? Psssshhhh. I’m young and it’s too expensive!” But now I’m so grateful to be properly adulting and protecting myself, my belongings and my money.
Do you have these types of insurance? Why or why not?
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