Insurance is necessary to ensure your financial future. Whether you are a millennial or a baby boomer, everyone needs to have insurance to cover themselves in the event of an accident, injury, or loss.
Millennials may believe that they do not need as much insurance as older people, but the reverse is often true. Millennials may not have the earning power to cover losses such as car accidents or health difficulties. Paying insurance premiums is significantly less expensive than covering these losses on your own. P&Q Partners explains why millennials need insurance and discuss the four main types of policies each person needs.
Millennials are likely to ignore a medical condition or to delay seeking treatment due to the cost. They may feel that a cheaper premium insurance plan that only covers catastrophic illness or injury is a good investment. This can lead to significant financial impacts in the event of a problem. Even if you are a healthy person, you may get into an accident or catch a contagious disease like the flu with complications. Prescription drugs can be very expensive without insurance.
When you decide on an insurance plan, look carefully at not only the premium amount but also the deductible and co-pays. A high deductible can mean that you have to pay as much as several thousand dollars before insurance covers you. Even if a plan does not have a high deductible, co-pays themselves might be a financial hardship. Try to balance your expected medical needs with an affordable premium and co-pays.
Home and Renters’ Insurance
Mortgage companies will require that homeowners carry insurance, but renters are under no such obligation. Renters’ insurance covers all of your belongings in the case of fire, theft, or other losses. Renters’ insurance is a bargain compared to the cost of replacing your belongings. Even if you don’t feel like you have a lot of personal belongings, it makes sense to carry renters’ insurance. You can add low-cost riders for expensive belongings like jewelry and musical instruments.
You may be surprised to learn that millennials need life insurance. When you purchase life insurance, your age at the beginning of the policy helps to dictate the price. You can often keep this price for 30 years with a term life policy. For millennials with children, life insurance is a must buy. No one likes to think about the event of their own death, but life insurance is necessary to plan for your family’s future.
Even if you consider yourself a good driver, car insurance is a must. Nearly every state requires that each driver carries a minimum of liability insurance, but collision and comprehensive policies are also a good buy. Even the smallest car accident can cost a lot with today’s advanced vehicles. Bodywork is particularly expensive.
Liability insurance covers you if you cause damage or injury to the other driver. It is much easier to let your insurance company handle the claim than to try to do it on your own. If your car is totaled, the policy will cover the value of the car. You can also opt for a full replacement cost insurance policy, enabling you to get the same model and year as your previous car.
Insurance as an Investment
Insurance is an investment in your own future. If you come into misfortune, insurance policies can keep you afloat financially. Millennials should not assume that they are insulated from risk due to their age. Since millennials are less likely to have money saved for emergencies, insurance can be even more important. P&Q Partners urges all millennials to take on insurance policies to secure their financial lives.