Young people have different priorities than those who are further along in life. Millennials and Gen Zers are graduating from university or college, or just starting their careers or thinking about building a family. Insurance may not be foremost on their minds.
“For young people, I think their focus is, ‘I just need to make money,’” says Michelle Zambri, manager of Allstate’s Vaughan agency. “A lot of people think they don’t need something like life insurance until their 40s and 50s.”
But insurance has value at many life stages and there are benefits, such as saving you money, when you buy insurance earlier rather than later. If you’re a young person, these are the top five insurance products you should look into to protect you.
Your health plays a big part in determining how much you pay for life insurance. When you are young, chances are you don’t have serious health conditions, such as high blood pressure or heart disease. So, you don’t need life insurance yet, right? Wrong.
For one, even though your risk might be low, that doesn’t mean there is zero risk and the great benefit to getting life insurance when you’re young and healthy is that, if you lock in at a young age, your life insurance premiums are lower. That means you end up paying a lot less over your lifetime.
There are also life insurance policies available that offer lifetime coverage while making you money. Participating life insurance pays dividends to the policy holder. They can be used to reduce annual premiums, buy additional coverage, leave as a deposit to earn interest, or take the dividends as cash.
“If you have children or are soon planning to, putting a layer of protection in place for your family will not only give peace of mind if something should happen to you, but is also a smart financial move,” Zambri adds.
Many young people are jumping into home ownership, with nearly 48 per cent of Canadians aged 25 to 35 currently owning their home, according to a Royal LePage survey.
“You can’t afford not to have property insurance,” Zambri says. Unless you are able to buy your home outright, you will need it to get a mortgage.
Home insurance can protect you if there is damage done to the property, theft of personal possessions, damage or injury to people who visit the property, or damage you might cause to someone else’s property. Any of these unfortunate events can be enormously costly if you’re not protected.
Property insurance is also available to condo owners and apartment renters. Coverage for inside your condo protects you against liability claims and property damage and covers personal belongings that can be lost or damaged due to theft or fire, as well as any improvements you make inside. Tenant insurance also provides coverage for stolen or damaged possessions, living expenses if you have to move out while repairs are being made and liability when someone is injured while on your rented property.
Personal health insurance
Provincial and territorial health plans cover a lot but there are gaps. You want to be protected in case of a medical emergency in another country, or coverage for prescription drugs to treat health conditions or to pay for practitioners such as physiotherapists that promote wellness. Personal health insurance can help cover these gaps.
If you have a car, you’ll need auto insurance. Your rate depends a lot on your driving history, so the longer you go with a clean driving record and the more driving experience you have, your rates can come down, Zambri says.
When inquiring about insurance coverage for your car, you might find that the rates may vary between newer and older cars. Though a common misconception, older cars aren’t always cheaper to insure. With newer cars, many come with safety features that may reduce some premiums. Having a higher deductible can also keep rates low as well.
Driver education courses can lower your rates as well. And Allstate’s Drivewise® is a program in which safe drivers can save up to 30% on their auto insurance policy.* It’s an app that can be downloaded to your smartphone that gathers information about your daily driving habits.
One thing to know is where you live impacts your insurance premiums, Zambri says. If you live in an area where there are more car collisions or incidents of theft, the higher your premiums will be.
Non-owner auto insurance also makes a lot of sense for young people. Cars are a big expense, especially if you’re just starting out. Non-owner auto insurance is ideal for people who borrow or rent cars. It provides liability coverage that protects any assets you have if you have an accident and you’re sued. It’s also a way to show an insurance company you are a safe driver and keep your premiums lower when you buy a car.
Maybe you don’t have kids, but what about other members of the ‘family’, like pets? With the pandemic, pet ownership has soared across the country, with about 3.7 million Canadians acquiring a pet. Veterinarian bills can be expensive, especially for emergency surgeries.
Pets Plus Us pet insurance programs offer flexible coverage options for pet owners, including an Accident & Illness insurance policy.**
Insurance does matter, even when you’re young. Talk to an insurance professional about all five of these insurance products, to custom fit what’s best for you.
Previously published in December 2021
This information and the opinions expressed in this blog are based on research and interviews with the authorities identified, conducted on behalf of Allstate Canada. They have been provided for your convenience only and should not be construed as providing legal or insurance advice.
*Terms and conditions and some restrictions apply. Subject to eligibility.
**Terms and conditions apply. Pet insurance is underwritten by Northbridge General Insurance Corporation distributed by PTZ Insurance Services LTD. & Société d’Assurances Collectives (Sodaco) Inc. in Quebec.