Types of Insurance New Grads Should Consider

Insurance Guide for New Grads

Graduation. You made it! Congratulations! Undergrad is behind you, and you’re about to embark on the next phase of your life. And while that is super exciting, it can be nerve-wracking and even a little bit risky. Some of those risks, however, can be mitigated with the right types of insurance. As you start off on your own as a young adult, you may start building a life you’ll want to protect, and insurance can help you do just that. Whether it’s a job, grad school, traveling or the unknown that’s next for you, insurance can be an important part of building your finances.

1. Health Insurance

You’re young, you’re healthy… do you really need health insurance? Soon you’ll be required to have it under new healthcare legislation, and in the meantime it is valuable coverage to have. Young adults have the highest rate of injury-related emergency department visits of all age groups (source), so it is wise to consider a plan in case of an accident or illness. Health insurance comes in many forms, so what is best for you? It all depends on your situation. Be sure to speak with an agent to review your options before purchasing insurance.

  • Parent’s plan – under new health legislation, you’re allowed to stay on your parent’s plan until the age of 26. Speak with your parents to see if this is an option for you, and if this is the most cost-effective option available to you. This is a good plan for any new grad. If you are moving away from home or traveling abroad, however, check with your parents and the plan to see if health care in your are is available in the network.
  • Employee plan – if you get a job after graduation, many employers offer their employees health insurance. This is a good option for any young adult, especially those without coverage from their parents or those living in new cities.
  • Short-Term Medical – A short-term medical plan or temporary health plan is great for grads who are in transition. These policies are meant to fill temporary gaps in coverage, covering mostly accidents and sicknesses that may run the patient a big tab. Grads searching for jobs, waiting for school to start or waiting for an employer plan to kick-in may want to consider Short-Term Medical insurance.
  • School plan – If you’re off to grad school in the fall, and you don’t have coverage under your parent’s, your school may offer a plan you can join. If you are studying outside your home country, you may want to a consider international student health plan.
  • Individual plan – if none of the above plans are available to you, you may want to consider an individual plan. Be sure to shop around for competing rates and coverage.

2. Renters Insurance

Wherever you move after graduation, renters insurance can help you protect your belongings and liability. Do you know how much your stuff is worth? In the event of a loss, renters insurance can help you replace your property so you won’t have to dip into your savings to do so. Your needs may vary depending on your situation, so be sure to speak with an agent about what plan and limits are best for your.

  • If you’re getting your own apartment after graduation, you’ll want to consider a renters insurance plan. In fact, many properties are beginning to require that their residents purachse renters insurance. Your landlord won’t cover your property or the damages you cause to your apartment, so you may want protection of your own and renters insurance can help you protect your property and liability.
  • If you’re buying a home, homeowner’s is pretty much a no-brainer.
  • If you’re moving back in with the parents, you should be okay under their homeowner’s policy. Be sure to check the details to ensure your property is covered, and keep in mind the high deductibles on a homeowner’s plan, it may not be worth it to file a claim if your property faces a loss.
  • If you’re in grad school and living on campus, you may still be covered under your parents’ homeowner’s plan, just be sure to check the plan for details. Also consider the higher deductible, it may not make sense to file a claim against it and therefore renters insurance may be a better fit.

3. Auto

Auto insurance is a smart choice, which is why it is required in most states. These requirements are put in place to protect you, and as you’re just starting out, auto insurance can help you protect you and your finances. If you’ll be commuting everyday, consider a plan that takes those risks into account. Speak with an agent to determine the right coverage levels for your risk and budget.

4. Identity Theft

Those aged 20-29 are the most common target of Identity Theft (source). A growing problem, identity theft can affect your finances, sometimes seriously. With a new job or grad school gig, you won’t likely be taking the time to monitor your identity, which is where identity theft protection comes in. Consider a protection plan to help you keep your identity and finances safe.

5. Life

You’re graduating college, you may say, your adult life is just beginning! What do you need life insurance for? True! However, depending on your situation, you may want to consider it. Oftentimes you can lock in a good rate while you’re still young and healthy, and you may be coming up on life milestones where life insurance matters. Maybe you’re planning on proposing to your college sweetheart or having your first child is on the horizon – whatever the milestone, life insurance is something you may want to consider. Some employers offer life insurance coverage, but you may want additional coverage. Talk to an agent to find out whether life insurance makes sense for you.

Photo – Josh Thompson