Growing a solid financial foundation as a young professional starts with having the proper tools. Whether you just moved to a new city or you are looking to buy your first home, there are a few proactive steps that you can take to make the transition as smooth as possible. Here are four types of insurance that every young professional should know.
4 Types of Insurance That Millennials Need to Know
Auto Insurance
Sure, shopping for car insurance isn’t as fun as shopping for the car itself, but having full-coverage auto insurance can make all the difference after an accident occurs.
An auto insurance policy is an official agreement between you and an insurance company, where you can expect to pay a monthly premium in exchange for coverage on your vehicle. This contract is a promise between you and your insurance company that, given there is an accident of some sort, your financial losses are covered during the term of your policy.
There are two types of car insurance to consider:
No Fault Coverage: Your insurance company pays you and your passengers for medical and related expenses caused by injuries from a car accident, regardless of which party is at fault.
Liability Coverage: Your insurance company pays for losses that you cause.
Some states require you to have both types of insurance; however, when an accident occurs, and it’s your fault, you are required to pay for any damage caused. Car damage and bodily injury can be financially devastating, so the easiest way to avoid putting yourself in a tremendous financial burden is to prepare for the unexpected -- and make sure that you are covered.
Renters Insurance
Renting or buying your own home can be an exciting time. It’s no secret that some of our most prized possessions are kept safe within our home, and the goal should be to keep them safe. With renters insurance, you can sleep easy at night knowing your belongings are insured.
But what exactly is renters insurance?
Renters insurance protects the renter’s belongings in the event of a catastrophe. Renters insurance protects all of your belongings within your space. As we’ve discussed, sometimes landlords have lax (or no) coverage for renters in the event of an issue to your apartment or home; they usually only have coverage on the building itself.
The unexpected can happen to anyone at anytime. This could be a break-in, a fire, or even a flood. Although planning for the unexpected can seem a bit tedious, it’s necessary. A renters insurance policy ensures you’re covered and prepared for whatever’s next.
Homeowners Insurance
Buying your first home is both exhilarating and intimidating. The best way to be prepared is to get prepared! Homeowners insurance protects both the home’s structure as well as the personal belongings within the home. You will want to have homeowners insurance on your mind before ever going into the homebuying process.
There are several different policies that you can choose from when becoming a homeowner, and the amount of coverage on the policy will determine how much your insurance company will pay towards rebuilding your home in case of an emergency. If you are in the market to buy your first home, consider shopping around for policies that work for you and your budget. It’s important to be savvy on what options are out there for you -- before you sign the dotted line.
Life Insurance
Life insurance may be the last thing you are thinking about as a young professional. However, life insurance is one of the most important types of insurance because it ensures that, if anything were to happen to you, your financial burdens would not fall on your loved ones. There are two types of life insurance: permanent and term insurance.
Term Insurance can be viewed as temporary insurance because it only protects you for a certain number of years. This type of insurance only pays out if there is a death during the term of the policy, which usually ranges from 10-30 years. Term insurance does not usually come with any other benefits. This insurance may be the best option for you if you see yourself meeting your financial responsibilities to those who depend on you during the term of your policy.
Permanent Insurance is exactly what it sounds like: permanent! This is a long term form of insurance that will pay a death benefit if you were to pass away. There are three types of permanent life insurance: universal life, variable universal life, and whole life. Each of these coverages vary slightly and offer different things.
If you’re unsure on which type of life insurance you need as a young professional, an independent agent at Pepper, Johnstone & Company can point you in the right direction.
No matter which direction you choose to go, consider life insurance a necessity. As a young person, it’s easy to ignore it as a policy to acquire later in life, but unfortunately, tragedies can strike at any time. A life insurance policy can make all the difference financially for your loved ones should the unexpected ever happen.
Entering adulthood and starting your individual career can be just as exciting as it is scary. Whether you are starting a new career, moving to a new city, buying a new car or exploring your options within the housing market, insurance options are available to make your life easier.
We encourage you to explore your options as a young professional and if you need further guidance picking the right policies for you, we’re here to help.
Pepper, Johnstone & Company protects your family with a choice of multiple insurance companies to choose from, for home, auto, and business. We've helped countless people save money on their insurance while making sure they're properly covered. Visit us today at our website, or give us a call at 256-232-7818 to get us working on a quote for you today. To learn more about our range of insurance options, click here.