More and more young adults are starting to take charge of their financial future. It could be the fact that the age of those entering the world of debt is getting lower, or maybe it’s due to an improvement in financial education. Whatever the reason is, it’s a good sign to see fiscal responsibility becoming a
priority; monetary negligence can provide rough roadblocks for the future, and in order to really prepare for the years ahead, it’s important to start planning today. If you’re a young adult who wants to pave a smooth, successful path, here are three types of insurance policies you might want to consider.
There are quite a few reasons you should consider taking out a life insurance policy as a young adult. You’ve probably heard that you can get cheaper premiums, and that much is true; when you’re young, free of health problems, and aren’t practicing any high-risk behaviors (smoking, drinking heavily, etc.), you’ll pay a fraction of the cost that many older individuals would.
Aside from simply saving money, you’ll also be able to secure your coverage. The truth is that no one knows quite what the future will hold, and the luxury of a life insurance policy isn’t something that’s guaranteed. If you were to develop a health disorder, companies might outright deny you any coverage; however, if you were develop that same disorder and already had a policy in place, your insurance agent would have no choice but to keep your coverage for the same price you originally signed on for.
Income protection insurance doesn’t get as much attention as other types of insurance, but that doesn’t mean it’s not as important. When you’re a young professional, you’re developing what you want your lifestyle to be, and you’re busy figuring out what your future plans are in regards to marriage and home-buying. Since you work hard to support your habits, needs, and desires, it makes sense that you would take the initiative to protect your ability to keep up with the demands of your lifestyle.
Income protection insurance helps guarantee that you’d have a steady source of income coming in (generally up to 75% of your monthly earnings) if your career was put on hold due to an injury and illness. Whether you’re making enough just to pay your rent, or generating a generous amount of revenue, making sure you could pay your rent and put food on the table if you were unable to work provides some sound peace of mind.
There’s a common misconception that you don’t need insurance for your property unless you own a home, but that couldn’t be further from the truth. Even if your landlord’s coverage applies to the outside of the building, you’re still responsible for covering your own belongings. The good news? A typical renters policy is generally under $20/month, so it’s affordable even if you’re scraping your pennies together.
A policy covers your personal belongings (clothes, furniture, electronics, etc.) if your property was damaged or lost due to fire, lighting, water damage, theft, or vandalism. It also covers legal and medical charges if anyone visiting your home injured themselves in your property. There are many addendums you can add onto your policy as well to cover more expensive possessions or damage due to natural disasters (floods, tsunamis, hurricanes, etc.) which would be a good idea if you live in a geographical location where that’s more of a concern.
When you’re young, it’s natural to overlook the importance of insurance past auto/health policies, but if you’re truly interested in protecting your financial years ahead, life, income protection, and rental insurance are a few options you might want to consider. There are, of course, much more exciting things to put your funds towards, but insurance is one of those things you’d rather have and not need that need and not have.
Arlene Chandler is a freelance writer who enjoys putting in her two cents when it comes to financial planning. When she’s not writing about finance and Life Cover from Suncorp, she likes watching documentaries, trying new food, and basking in nature.