Learning to manage this financial tool

Insurance Questions for 20-Somethings

by Paige Estigarribia

Related Articles

What Is the Best Type of Life Insurance for New Parents?

Saving $20K as a 20 Something

Don't Get Married Without Doing This Paperwork

If you're in your early 20s or you've got children or grandchildren in their 20s, insurance needs might be the last thing you (or they) are thinking about. But even in the early 20s, you have responsibilities that insurance could cover. We reached out to Kevin Matthews, a licensed financial advisor and author of Starting Point: How to Create Wealth That Lasts to give us some insight on insurance needs for 20-year-olds. Here's what he had to say:

Q: Is there one insurance fact that most 20-somethings tend to overlook?

Kevin: Yes, millennials tend to overlook the fact that health and life insurance may be necessary even at a young age. We're often one major medical bill away from a personal financial crisis. Insurance is often an inexpensive way to lessen that risk and keep your financial goals on track.

Q: What basic insurance would you recommend for 20-somethings?

Kevin: I would recommend basic health insurance if you're no longer covered under your parent's plan and just enough in life insurance to cover any debts, such as student loans. If you have a spouse and/or children,you will want to contact an insurance agent or financial advisor as your situation will require more planning.

The good news is that most employers provide these basic coverages and they are typically very inexpensive for millennials, sometimes less than $20 per-month.

Q: When deciding on whether to take on insurance, what are some things to keep in mind?

Kevin: When taking on insurance, suitability is key. Insurance is not a one-size-fits-all. If you have no children, no spouse and no large debts, you may not need a large life insurance policy. As for health insurance, you can take the coverage that you feel you need, based on your family history. As for myself, I elected to drop my vision plan because I've never worn glasses, nor do my parents.

How much life insurance do you need as a young adult? Get your free term life insurance quote from PolicyGenius, a Dollar Stretcher trusted partner.

Q: Is there an optimum time/age to start considering your own insurance needs?

Kevin: Because of the new health laws, 26 has become the optimum age to consider your own insurance needs. However, if you have kids or get married before then, you should seriously consider insuring your family's needs as soon as you can.

Q: Can you expect insurance needs and costs to change as you get older?

Kevin: Yes! You can certainly expect insurance costs to change as you get older. That's why it is important to get insured in your 20s to take advantage of cheaper costs. Your needs will likely change as well. Your health insurance will include your children at some point; your life insurance plan would likely cover the cost of their college and any remaining mortgage debt.

Insurance can be a very important financial move. Hopefully these tips from Kevin Matthews are helpful to you, or your 20-somethings loved ones who are just considering insurance for the first time.

Reviewed May 2017

Kevin Matthews is a licensed financial advisor and author of Starting Point: How to Create Wealth That Lasts working in NYC and a 25-year-old alum of Hampton University.

Paige Estigarribia is a writer for The Dollar Stretcher who enjoys writing about food, frugal living, and money-saving tips. Visit Paige on Google+.

Take the Next Step:

  • It is never too early to start saving. Compare money market rates with our best rate finder. Now is the time to start saving for your future.
  • Find out if you can benefit from student loan debt help.
  • Join those who 'live better...for less' - Subscribe to The Dollar Stretcher newsletter, a weekly look at how to stretch both your day and your dollar! Subscribers get a copy of our ebook Little Luxuries: 130 Ways to Live Better...For Less for FREE!

Share your thoughts about this article with the editor.

Stay Connected with TDS

Little Luxuries

to the Dollar Stretcher newsletter and get a copy
of our ebook
Little Luxuries:
130 Ways to Live Better...For Less
for FREE!

Your Email:

View the TDS Privacy Policy.

Get Out of Debt