The Four Forms of Insurance, Young Americans May Just Need

Countless types and kinds of insurance are sold in this country, but for young Americans, either in their first job or just out of college they more than likely only need four types of key insurance.  These four should serve as a series of boxes to be checked after you rent your first apartment and move out.

Auto Insurance for the Young:

At the top of our list is probably the one form of insurance that most younger Americans are familiar with – Auto Insurance.  Car insurance, as it is often known as, is often expensive for youthful drivers. If you have a driver’s license you need auto insurance.  Each state has their own set of minimum requirements and regulations. Auto insurance though should be looked at as something more than just as a requirement.  Consider purchasing a higher level of bodily injury and uninsured motorist coverage than is required by your state regulator.

Life Insurance:

Should young Americans buy Life Insurance?  Perhaps, or perhaps not!  This really depends on exactly where they are in their life.  A young college student probably can go without it, but a new parent should definitely not.  If you have anyone that financially depends on you such as a Spouse or Child, go get level term life insurance soon.  Being young, term insurance is typically super inexpensive. This is one of the main reasons that many Americans do choose to purchase term insurance when they are young.

Also, don’t be fooled into believing that you need complex forms of overpriced permanent life insurance such as Universal and Whole life.  These “needlessly complex” forms of insurance mix an investment component with a life insurance product. In general its best to separate out your life insurance and your investments.  You are better off starting off saving in 401Ks and Roth IRAs, than with life insurance.

Renters Insurance:

Renters Insurance is a form of home insurance for those that rent either apartments or houses.  It helps to protect your personal property, liability, and can provide a some cash to temporarily live somewhere else in the event of a covered peril occurring.  Make sure you request replacement valuation on your personal property and a personal injury liability endorsement which can really come in handy for younger, social, individuals.  The best place to buy low cost renters insurance is typically direct from your auto insurer.

Health Insurance:

Last but certainly not least, young American absolutely need health insurance.  Parents provided, employer provided, or independently purchased all Americans need it.   The catastrophic costs associated without having it are just too high to fathom. There is no need for debate on this one, all young Americans need health insurance.

But Wait, Aren’t there more Types of Insurance:

There are countless other types of insurances that young Americans could consider some good and useful such as Flood Insurance, Earthquake Insurance, and Disability Insurance and others that I would generally avoid such as Mortgage Protection Insurance.  But for young Americans that are just getting started out in the world – these simple four simple forms of insurance: Auto, Term Life, Renters, and Health – should be enough to protect you, affordably in the beginning.

If you have a special situation – perhaps you still live with your parents, than some of these forms of insurance may not specifically apply to you.  There may be also be one of types of insurance that you should consider based on your special situation. Speak with a good independent agent and don’t be afraid to ask lots of questions.

Scott W Johnson is the owner of Whole Vs Term Life Insurance.com a division of Marindependent Insurance Services LLC – a California Independent Green Certified Insurance Agency.  Johnson lives and resides in Marin County California.

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