You're in a weird place in life right now. You're growing up. You’ve reached the age where you may be taking out student loans, buying or renting a place to live, having kids and ultimately, purchasing insurance. These major life events for millennials make it extremely important to have a financial security net. However, recently Princeton Survey Research Associates International named millennials the most underinsured generation.
There are many reasons why people of all generations avoid purchasing insurance. It‘s often seen as a big investment, but that doesn’t necessarily mean that it’s an expensive one. Insurance probably costs less than you think. According to the National Association of Insurance Commissioners (NAIC), millennials overestimated the cost of renters insurance by more than five times its actual cost per year.
Don’t let any initial confusion or preconceived notions drive you away. Insurance provides essential financial protection for your future, so now’s the time to start “adulting” and take that first step.
Here are five tips for buying insurance:
- Shop smart. When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation.
- Look for discounts. Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free or, if you’re in school, getting good grades. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.
- Fill in the gaps. An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.
- Purchase life insurance—you aren’t too young. Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.
- Talk to an independent agent. An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent like us here at York Insurance Agency will work with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from our agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.
We know this can all seem scary but it really isn't. Please reach out to us if you have any questions, we're here to help!