What’s the deal with insurance?
Young adults often avoid buying insurance because they don’t understand it, don’t feel they need it or decide that they can’t afford it!
This is a pretty common sentiment for many who have limited experience with insurance. Moving out of the home for the first time means that you have to take on adult responsibilities and examine your needs for insuring and protecting the safety of your assets.
If you own a car, the law requires you to have car insurance. Insurance protects you from any damages, and covers your own medical expenses and loss of income from driving related injuries.
Most students don’t take advantage of tenants insurances, despite owning a number of valuables. Some of the things you own – computer, cell phone, tablet, furniture and clothes – could be costly to replace in the event of a fire, theft or loss. Tenants insurance is not very expensive, but before you buy, check your family’s policy to see if you are already covered.
Life insurance is another type of insurance that is available. The necessity of life insurance for single students is dependent on your personal situation. Obtaining life insurance while young and healthy could save you money in the future. Premiums are lowest as a young adult and when you don’t have any pre-existing medical conditions. Choosing to invest in life insurance later in life or after a medical scare could result in exclusions and higher costs.
In Canada, the law requires all drivers to have car insurance. Driving without coverage is an offense punishable by fines or license suspension/seizure. Insurance for young adults can be very costly and so the more you know the better choices you can make.
Insurance is based on:
- Your credit history
- Your driving history
- Type of car
- Age of car
- Type of insurance
Insurance Tips for New Grads
- When you are assessing a job offer you might want to think about the total compensation rather than just the salary- it may actually be better (and cost effective) to take a lower paying job with benefits than one that does not offer such extra’s.
- If you take the higher salary do figure out how you much insurance will cost, how you will meet these needs, and whether you can close the gaps before you sign the contract.
- If you are in a relationship, you could talk to your partner about being added to their plan.
- Check into offers of insurance by McMaster’s Alumni Association. You may receive discounted rates for home, auto, life and other coverages.
- There are different types of life insurance – whole life and term insurance. They both have different advantages and disadvantages, before making decisions make sure you understand all the options. A consultation with an insurance broker is recommended.
- Insurance can be difficult to get and if you are applying for insurance on your own (not with an employer) you may need to get a physical examination and provide a detailed medical history. You may not get approved if you have a pre-existing condition.
- Consider long term disability as a necessary insurance to keep your dependents and yourself in reasonable financial shape. This is particularly important if you are considering self-employment as this coverage is essential.
For general insurance information see www.fsco.gov.on.ca