You are
fresh out of high school, college or a tour of the military. For the first time, you are truly on your own
as a young adult ? and you?re on your own for insurance, too, as most insurers
drop a child from the parents? coverages once the child leaves home or school.
Below are
some of the insurance coverages you should consider.
Health ? A
medical plan may be available at your job, but not all employers
provide health
benefits, and not all employees join available health plans. You may
not have found a job yet out of
school, or you may be between jobs. As a
consequence, many young people choose to go without coverage. But
that?s not wise. Even the young can suffer an expensive major
illness or accident.
If you are
between jobs, and you were covered under your previous employer?s plan, you
probably can continue that group coverage for up to another 18 months through
the federal program COBRA. But before
continuing under COBRA, compare the cost against similar private coverage.
If employer
coverage or COBRA isn?t available, consider a temporary short-term health care
policy (1-12 months) to cover you until you become eligible for a new
employer?s plan. Or apply for a
high-deductible permanent major medical policy.
Either of these types of policies can be reasonably priced, but you must
qualify medically and they usually don?t cover pre-existing conditions.
Disability
? Your working income is possibly your most precious financial resource at this
stage. Yet as a young person, your odds
of being disabled by illness or injury at least 90 days or longer before age 65
are higher than your odds of dying, according to the Insurance Information
Institute.
Disability
insurance, sometimes called income-replacement insurance, pays a portion
(typically around 60-80 percent) of lost wages if you?re unable to continue
your job due to an accident or illness.
If an employer offers disability coverage, it is usually limited to 6 to
24 months, and the amount provided may be insufficient for your needs. State-sponsored worker?s compensation
programs may provide income, too, but normally only if you?re injured on the
job (a few states provide for non-work-related disabilities). Social Security may provide benefits, but
only if the disability leaves you unable to work at virtually any job.
If your
employer?s coverage doesn?t pay at least 60 percent of your income and doesn?t
last to age 65, you?ll likely want to supplement it with private coverage.
Renter?s ?
Your personal assets are probably modest, but nonetheless, it could cost you
thousands or tens of thousands of dollars to replace clothes, a computer, audio
equipment and other property if stolen or destroyed. Your landlord?s insurance does not cover your
personal property.
A personal
renter?s policy is usually quite affordable ? $150 to $300 a year will probably
buy the coverage you need, though you might need additional coverage for
high-valued property such as jewelry.
Also see if the policy includes liability coverage in the event you are
sued for injuries suffered at your residence.
Auto ? Once
you?re no longer a student, you may not be able to insure your vehicle through
your parents? policy. Shop around. Rates vary widely for comparable coverage. Also, find out if you can save premium
dollars by purchasing renter?s and auto insurance from the same company.
Life ?
Because you?re single, you probably don?t need life insurance yet. It generally is designed to provide income
for those whose financial security is tied to you, such as a spouse, child or
dependent parents.
Some
financial experts argue, however, that it can be worth buying life insurance
while you?re young because premiums are relatively low and you?re likely in
good health. You may want to consider
buying enough life insurance to cover your debts and final expenses.
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