New Grads Face New Insurance Needs
It’s a rite of passage for college students to don cap and gown and march for graduation ceremonies. In the spring of 2008, 1.5 million Americans will earn a college degree, according to the National Center for Education Statistics.
Unfortunately, even with a hard-earned diploma, many leave for the working world without knowledge of one of life’s critical products: insurance. While every individual’s needs are unique, here are five basic insurance coverages that all college grads should consider, to see if they apply:
1. Auto insurance. A shiny new car, whether owned or leased, holds appeal for newly employed college grads. Auto insurance helps cope with the expenses of accidents, vandalism or theft. A lender or leasing company that finances the vehicle will require auto insurance. Car accidents can create large liabilities for a driver, so the liability portion of auto coverage helps protect the bank account. Plus, auto insurance covers many legal expenses if a driver is sued.
2. Health insurance. Following graduation, individuals likely will not be covered by a parent’s health insurance policy. College grads will need coverage through an employer or an individual health insurance policy. Individual policies can be pricey and differ significantly in coverage, so talk with a Trusted Choice® independent agent about what makes the most sense.
3. Homeowners or renters insurance. College grads starting out may not own a home yet, but may rent a residence. To make sure their possessions are protected, homeowners and renters insurance offer comprehensive coverage whether at home or traveling. Liability insurance included in renters and homeowners coverage also helps protects against the risk of being sued. There usually are limitations on renters coverages within a group house-a typical post-graduate arrangement-so it is important to understand the details of a policy.
4. Life insurance. New grads may find a job with an employer that offers group term life insurance coverage. However, those with children may find it worthwhile to buy additional term life insurance or permanent life insurance, which builds cash value over time.
5. Disability insurance. This is a vital but often-overlooked insurance coverage. It provides income when a person is injured or disabled, whether on the job or off. A Trusted Choice® independent agent can calculate the right amount of coverage to help a person live while recovering.
The new college grad may want to lean financially on parents’ insurance coverages as long as possible. While that makes sense, it’s not always viable. For instance, auto insurance companies will require an owner or lessee of a car to carry their own coverage. And most health insurance plans cover an insured’s children up to age 18-or age 22 if the child continues as a full-time student. If over 18 and not a full-time student, an individual will need their own health insurance coverage.
