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What College Graduates Need to Know About Insurance

graduatesBy Sara Thomson

Are you jealous of those students going back to college? Your days of study for the diploma may have ended but learning is still important.

  1. Insurance can help protect you from debt.

When you purchase insurance you pay for it and hope that you never need it. It’s a strange type of investment. Insurance may seem impractical if you are just starting off your career, but it is an investment that can protect against unplanned debt. Lawsuit judgments, hospital stays, or car accidents can cost a lot of money. The proper insurance policy can help to protect you. Look into insurance companies with a good history and work with a broker or agent that can help you find the best coverage at a fair price.

  1. You need health insurance, even if you are healthy.

Many people think health insurance is expensive, but health insurance can actually act like a discount program for medical services, so those without it end up paying more for health services than those with health insurance (even a low cost plan). In addition, if you can afford health insurance and decide not to purchase it, there is a government-mandated fee called the individual shared responsibility payment. This payment can be as little as $695 and as much as 2.5% of your annual income so be careful. Many companies do have health insurance plans, called group insurance, which you can choose, you can also purchase healthcare through an insurance company or your state’s health insurance marketplace website. Another option is to remain on your parents plan after 26 and pay a fee. A key consideration for this option is: privacy. It is likely that the insurer will send the policyholder, in this case your parents, insurance notices describing any care you receive.

  1. Long-term disability can save you from loss of income.

When a person gets sick or injured and cannot work for an extended period of time, their long-term disability insurance kicks in and protects loss of income. Most young adults do not have an emergency fund or enough money in savings to continue paying the bills without the income from their employer. With long-term disability insurance the threat of relying on an emergency fund or savings account is lowered since the policy pays while you are not working. It is still a good idea to have an emergency fund or an account strictly for savings money!

  1. There is insurance for renters.

Most new college graduates rent instead of purchasing a home. Renters insurance policies can be a great low cost way to cover the contents of your apartment, like electronics, family heirlooms, or jewelry and cover you for legal responsibility or liability if an incident happens, such a as an injury or other accident at your place. These policies are affordable because they do not cover the entire building like a homeowners insurance policy. Purchasing renters insurance is easy and simple through your Hometown Insurance agent.

  1. Car Insurance is required in every state except VA, NH, MS*

Having the state minimum coverage on your car or truck may be inexpensive but it is definitely not the best solution to save money or provide protection. Many times minimum car insurance partially covers the other person in an accident and will not offer much coverage for you or other people in your car. Better policies offer higher coverage in what is called underinsured/uninsured motorist and additional personal injury protection. These items can save you on medical costs and offer enough coverage in the case of a collision. Ask your agent what portion of your policy covers you and what covers others.

*state fee is required in VA and post cash bonds are offered in NH and MS

If you are a new college graduate or you know one! please call Hometown Insurance at 631-589-0100 or email us at service@hometowninsurance.com for quotes, and information on the best insurance plans for young adults.

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