What Type of Insurance Should You Have in Your 20s or 30s?
When you turn 20, it feels like you have your whole life ahead of you; the last thing on your mind is what will happen if you’re involved in an accident.
But as you age, you may wonder what the best ways to protect yourself are. You might have heard that the sooner you get insurance, the better.
With a limited budget, how do you choose the right insurance policies for your needs? We’re going to review various types of insurance and give you an idea of what might be best for you:
Car Insurance
If you don’t own a vehicle, skip this section. But if you do, we suggest you keep reading.
In all likelihood, you’re already required to have car insurance once you purchase a vehicle. But if you don’t, we strongly recommend it. A basic policy covers property damage, medical expenses, and bodily harm.
Driving without car insurance is illegal in Canada. If caught doing so, you may have your licence suspended or your vehicle confiscated. Even though car insurance is another monthly expense, it isn’t worth the financial consequences of driving without it.
If you’ve had car insurance for several years, it may be worth looking for a better rate. Most insurance policies affect your credit score, so try to use your credit wisely. With a better credit score, you may be eligible for more affordable plans.
Disability Insurance
Even if you’re in excellent health today, you never know what tomorrow might bring. As we age, we have an ever-increasing amount of bills to pay. We rely on each pay cheque to cover them.
But what if something unexpected happened, and you could not work anymore?
With disability insurance, you can replace a portion of your lost income if you cannot work due to a chronic illness or accident. It can grant you peace of mind to know that if an accident happened, you wouldn’t be left without income.
You can choose long-term or short-term disability insurance, depending on your concerns. With short-term insurance, you’ll be covered for up to half a year. Long-term insurance is designed to replace your income if you cannot return to work.
Life Insurance
Life insurance is designed to provide income to those who depend on you if you pass away. However, not all providers offer equal plans. As you settle into adulthood, you may ask yourself: how do I find the best life insurance in Canada? To find a policy that meets your needs, call us, and we'll compare the rates of different insurance companies.
If no one relies on you for financial aid, you don’t need life insurance. Even if you plan to have a family in the future but don’t have one currently, you’re better off putting that money into a savings account until you do.
Life insurance will never be a wrong investment decision—it prevents you from passing on debts to others. However, if your finances are already stretched thin, and you have to choose between a few policies, you might want to wait until people depend on you before investing in life insurance.
Home Insurance or Renter’s Insurance
Now that you’re living alone, you’ll need some protection for your belongings and the property you live in.
As a homeowner, you’re already familiar with how much owning a property costs you. But what would happen if you dealt with a fire, flood, or roof collapse? Such a significant expense might put you in serious debt. Home insurance is designed to protect you from these costs. If you plan to purchase a home or already own one, consider a home insurance policy.
But as a renter, you don’t own the building you reside in, whether it’s an apartment complex or a house. That being said, you could be liable for damages that occur, such as a fire. Tenant insurance protects you from these expenses and ensures your personal belongings during a flood, fire, or break-in.
The takeaway here is this: it’s wisest to purchase insurance before you need it.
All in all, we recommend talking to an experienced insurance broker about your options. Doing so can help you understand what you need to keep yourself, your family, and your assets protected.