How to Purchase Insurance in Your 20s
Jun 28, 2024
2 min read
As you transition from relying on your parents to being an independent adult, managing your finances is a big deal. It’s not just about putting gas in your tank, food in your belly and a roof over your head.
You need to prepare for unexpected expenses.
How would you replace your car if you got in an accident? How would you pay your medical bills if you broke your leg when you were hiking? Where would the money come from if your apartment had a fire and all your possessions were destroyed?
In these scenarios, you need insurance to help cover the costs. But what type of insurance do you need as an independent adult? Here’s what you need to know about insurance options for young adults.
Health Insurance
You can stay on your parent’s health insurance policy until you’re 26 years old. If you’re working, you may be able to enroll in health insurance through your employer. If you’re a student, you might have health insurance options through your school.
Otherwise, you’ll need to buy health insurance on your own. If you’re under age 30, you can buy a catastrophic health insurance plan. These plans protect you from worst-case scenarios such as serious accidents or illnesses and provide some primary care. With them, you have lower premiums but high deductibles. You pay for most of your medical care yourself.
If that’s not for you, another insurance option for young adults looking for health coverage is to find a plan through the Health Insurance Marketplace. Costs vary based on your age and the type of coverage you choose.
Renter’s Insurance
If you’re a college student and your parents have homeowner’s insurance, their policy may cover your personal belongings. Otherwise, you may need renter’s insurance.
You might not think your belongings are worth much. But if the worst happens, like a fire, explosion, smoke damage or theft, replacing all your clothing, furniture, kitchen tools and appliances, electronics and personal items can add up to a lot of money.
Unlike homeowner’s insurance, which protects the whole structure and the belongings, renter’s insurance is designed just for your possessions. So, it can be affordable insurance for young adults.
Auto Insurance
You can stay on your parent’s car insurance policy as long as you live with them or you’re a college student. Once you move out, you need to get your own policy.
Auto insurance can be expensive when you’re younger, especially if you haven’t been driving for long and you don’t have a proven record of good driving. One option for young adults getting affordable insurance is to enroll in Driveology.
Driveology works with an app and a small tag behind your car’s rearview mirror. It tracks your driving habits. Driving under the speed limit, braking slowly and staying off your phone when you’re behind the wheel all lower your costs. You get a 10% discount for signing up, and over time, you could save up to 50%.
Life Insurance
When you’re asking yourself, “What type of insurance do I need?” and you’re in your 20s, life insurance may not come to mind. But you have a lower risk of medical conditions when you're younger and healthier. That means your life insurance premiums will probably be lower. You’ll typically pay that same premium going forward, so you may want to lock in that low rate now.
One Deductible
The One Deductible Advantage at Farm Bureau may help you save money. Here’s how it works. You’ll have deductibles on your auto and renter’s insurance policies. That’s the amount you have to pay before insurance kicks in. If you have a $1,000 deductible and you get in a car accident that costs $5,000 for repairs, you pay $1,000 and your insurance pays $4,000.
If you have your auto and renter’s insurance with Farm Bureau, you may be able to pay one deductible for damage that comes from one event. So, for example, if a fire damages your apartment and your car, you would only pay one deductible, not two.
Adulthood Isn’t Easy. Farm Bureau Can Help.
Finding good insurance for young adults isn’t always straightforward. Farm Bureau’s agents know the ins and outs of what you need and can help you get covered at a price that’s right for you. Reach out today — you don’t have to go through it alone.