Our Basic Insurance Needs

Our Basic Insurance Needs
Katie Jackson
Personal & Financial Management A2
10/22/19

Insurance is that thing in the Game of Life that’s constantly leeching money from us, but never seems to be doing anything for us. Though it sometimes seems useless, we all end up paying a monthly bill for something that doesn’t seem so monthly anyway. All for it’s financial coverage in the event of an unexpected occurrence. Some of us may already be paying for some insurance. Even in my own experience, there’s quite an abundance of families that expect their teens to be paying for their own car insurance. However, paying our parents for the car insurance and managing the entirety of our own insurance are two completely different stories.

While many of us will go off and begin to live more independent lives, we’ll start to notice that you can get insurance on just about anything. So what insurance will we really need, and what is worth our money? Not a simple question. Not a simple answer. But, we can start to get a head start now about understanding what we’ll be needing to prepare ourselves for. Looking at the near future, it’s pretty safe to say we’ll all be looking at some bills and payments taxing on our thinning wallets more than we ever have before(what with new bills to pay, rent, loans, saving, investing, etc.). Who wants to be looking at spending money on something they may not even need? But insurance certainly has its place in our budget despite what it may look like.

Just below 27 million people in the US were uninsured in 2016. Consequently, those who are uninsured often have to face unaffordable bills, especially on the medical front.  When facing medical obstacles, it’s not as easy to ignore as getting around without a car for a while. These intimidating expenses can quickly snowball into even worse debts. So to prevent that, here’s the basics of basics on what bare minimum insurance we should be looking out for after leaving the nest.

Life Insurance
Life insurance is what supports bereaved families that need financial help to deal with the drastic decline of family income. For what it looks like at face value, there doesn’t exactly seem to be a pressing need for the majority of 18-25 year olds who often don’t have kids or spouses yet. Even more so when you look at the fact that these are people who have barely even entered drinking age are generally healthy and youthful, usually not the people we generally think about passing away in the near future. However, this shouldn’t be stopping you from putting the money aside for this one. It can be hard to confront, but despite how unlikely it may seem ensuring safety for the worst is what insurance is for. Though it is often seen as the insurance that protects those who live in a two story houses with a wife/husband, two kids and a dog, life insurance is for everyone. Although you may be the only one relying on your income, this insurance can benefit more than just a spouse and kids (ex. mortgage or college) after passing. You should be able to at the very least pay for your last expenses. This includes a burial. Other things, like yet to be paid medical costs, debt, loans, etc should also be considered. Although not usually legally bound, these expenses have the potential to become your parents or siblings responsibilities if you do not take care of them yourself due to persistent pressuring debt collectors.

Car Insurance
Most of us will probably need car insurance, because owning a car basically requires it. This will protect you if you get into a car accident, your car is stolen, vandalised, or damaged due to natural disaster. The coverage can get pretty broad too (certain types are even required by law). In an accident you can be covered for Liability where it could pay for the damage and medical bills of someone if you hit them, Collision and Comprehension where it covers your troubles, Personal Injury Protection where it covers your passenger’s troubles (medical, funeral costs, etc), and Uninsured or Underinsured Protection for your own property/injury when someone who is uninsured/underinsured causes damage to you or your property.

Health Insurance
Ideally, the hope is that our overall medical expenses will only add up to routine check-ups and over the counter medicine. Unfortunately, this is not an ideal world and when an unexpected and unavoidable emergency comes up that requires an overnight stay at the hospital or even surgery,  the bills quickly rack up. Sometimes, the cost of these bills can take years (even decades!) to pay off in certain circumstances. And that’s where our health insurance steps in. Right out of high school, the majority of people will still be on their parents/guardians insurance plans for a good number of years. This is because, technically you can still be included in their plan even if you’re married or do not live with them up to the age of 26, and most people choose to take advantage of the policy once moving out after high school. Perhaps some of us won’t have to worry about this one quite so soon after all.

Renter’s Insurance
This insurance is the protection for your personal belongings stored in your rental property. What is included and covered depends on the policy you have, be it jewelry or technology like a smartphone, laptop, or TV, etc. This will help with stolen or damaged belongings or even the home itself. Even damage due to the negligence of the loaner can be covered depending on your situation. In somewhere like college where you may be residing in the on-campus housing, your parents’ insurance could possibly still cover you on campus, though the policy can vary school to school and plan to plan.

Other
As said before, you can find insurance for practically anything, but there are certain ones we simply shouldn’t go without. In addition to those stated above, there are other pretty important types of insurance we should think about too. For example, disability (what comes after our hospital stay when we’ll no longer be able to return to work?), dental(for similar reasons as health insurance), or even travel(trip cancellation, lost luggage, etc). Every one of these insurances come in all shapes and sizes. There are a variety of plans from a variety of companies for us to choose from. Although it seems daunting, we’ve just got to try and keep it all in perspective while prioritizing and balancing what plans we need most. Simple Life Insure did a poll on what kind of insurance people have, and it’s quite interesting to see how people value their different types of insurance as we can see health being the most popular(above).

An infographic with similar arguments:

Works Cited

“3 Reasons to Consider Life Insurance for College Students.” Nationwide, www.nationwide.com/life-insurance-for-college-students.jsp.

Marquand, Barbara. “The Parents Guide to Insurance for College Students.” NerdWallet, 12 Aug. 2019, www.nerdwallet.com/blog/insurance/parents-guide-insurance-college-students/.

Mercadante, Kevin, et al. “How Much Does Term Life Insurance Cost?” Money Under 30, www.moneyunder30.com/term-life-insurance-cost.

Published: Dec 07, 2018, and Dec 2018. “Key Facts about the Uninsured Population.” The Henry J. Kaiser Family Foundation, 7 Feb. 2019, www.kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/.

Rose, Jeff. “Best Insurance For College Students in 2019: Life, Health, Auto, Renter's.” Good Financial Cents®, 22 May 2019, www.goodfinancialcents.com/best-insurance-for-college-students/#life.

Vohwinkle, Jeremy. “Why Do I Need Insurance?” The Balance, The Balance, 2 Apr. 2019, www.thebalance.com/insurance-basics-why-do-i-need-insurance-1289684.