The Millennial Insurance Guide for Ages 28-44

If you were born between 1981 and 1996, you are called a millennial. You range in age from 28 to 44 years old and, like everyone else, you are seeing a rise in costs, which include insurance premiums. Let’s look at some important data about millennials and dig deeper to investigate which insurance products you need and what you can do without.

• Health insurance is important to the majority of millennials, 66% of whom had private insurance while 16% remained uninsured.^[6]
• In 2019, 55% of millennials lived with a family that often included a child or spouse or both. However,14% live with a parent while another 14% live with a family member.^[1]
• As of 2022, a slight majority of millennials were homeowners at 51.5% while 25% have given up hopes of ever owning a home. A majority are renters.^[2]
• While car sharing became ‘a thing’ for many millennials, who make up more than half of ZipCar members, the majority do own a car or drive a car that is owned by someone else in the household.^[3]
• Only 7% of small businesses in the U.S. are owned by millennials, which means that 13% of millennials are business owners.^[4]
• According to a new study, less than half of millennials have a life insurance policy.^[5]

Let’s now look at the different insurance products more closely so you can determine which ones you actually need.

Key Takeaways Some types of insurance are absolutely necessary, like health insurance, car insurance and renters or homeowners insurance. Workers compensation is required if you have a business that employs workers other than yourself. Life insurance can help you create wealth, against which you can take out low-interest loans for a business or home improvements.

Health Insurance

Millennials have already gotten booted off their parents’ health insurance plans. If you’re one of the 16% of the millennial population that has no health insurance, you should reconsider the gamble you’re taking by having no coverage.

Subsidized Plans and High Deductible Plans Are Cheap

A subsidized marketplace plan can cost as little as $40 a month, and if you don’t qualify for that, there are other private insurance plans that will fit your budget. For those on the younger end of the spectrum, at the very least, buy a high-deductible bronze plan with a health savings account (HSA). At least there’s a deductible so if you end up getting injured or needing surgery, it won’t cost you tens of thousands of dollars to pay the bills.

Consider Costly Screenings

For people in their forties, keep in mind that some screenings are recommended and may cost hundreds, even thousands, of dollars if you’re paying out of pocket for the tests. A more comprehensive health insurance plan may make more sense for you.

Take a mammogram, for example. It may be an inexpensive copay with insurance but a 3D screening can easily cost more than $500, depending on where you live, without insurance.

Children and Health Insurance

If you have a child, they can have coverage on your health insurance policy, on the other parent’s policy or both health plans. While it may seem excessive, there are some benefits to having more than one health insurance plan and it is permissible by law.

Car Insurance

It seems that most millennials live with family members, even if they are unmarried. It’s important to remember that every person in your household will be evaluated when a car insurance company is rating you, which is why they ask who lives with you. You’re rated based on an assumption that your car may be used by someone living with you. So, if you live with people who don’t have a great driving or credit history, you may be paying more than necessary.

Working Around High-Risk Household Members

There’s a workaround to this, one of them being exclusion. If you exclude, say a teen driver living under the same roof who will bring your rates sky-high, your rate will be lower but if that teen crashes your car, you won’t be covered at all because they are an excluded driver on your policy.

Non-Owners Car Insurance Prevents Lapses

Car insurance usually follows the car. With that said, if you’re in between cars and use the ones available to you in the household, you have what’s called a lapse in coverage. It’s advised that you buy a non-owner car insurance policy so that when you do buy a car and car insurance, your rate will be lower. This type of policy is very cheap because it’s understood that you don’t have a car, but it’ll also protect you if you get into an accident and the car owner of the car you borrowed had inadequate insurance.

Liability Coverage’s Limitations and Full Coverage

Note that liability coverage only covers the other car, not your own, if the accident was your fault. You need collision coverage to protect your own car in cases where you are at fault or comprehensive coverage if your car is stolen.

Buying adequate car insurance is important, but you really don’t need to carry full coverage, or collision and comprehensive, if your car is worth less than $4,000. Check your car’s value with Kelley Blue Book to see what it’s worth today.

Business Auto Policy

If you use your car for work-related trips but not a standard commute, you will only be covered in an accident if you have a commercial auto policy.

Car-Sharing and Car Insurance

You don't need personal car insurance coverage if you choose a car-sharing service. However, if you have insurance, your policy would provide secondary coverage to any auto liability you may have if you have an accident.

Even if you’re car sharing, not having car insurance is considered a lapse in coverage, and your rate will be higher if you decide to buy a car and insure it. One work-around to this rate hike is to buy a non-owner car insurance policy, which is very inexpensive and will keep your rate low while providing secondary coverage for car sharing.

Millennials need to consider which insurance products they really need and which they can do without.

Renters Insurance

The majority of millennials are renters, and if you’re one of them, the importance of having a renters insurance policy, even when your landlord does not require it, cannot be overstated. If there is damage to the home you’re renting and the damage carries over to your belongings, your landlord’s insurance policy will not cover those belongings.

To get a claim payout to replace or repair your items, you’d need renters insurance, which is much less expensive than homeowners insurance, which typically covers the structure of a home as well as belongings.

Inventories Are Important

One big mistake renters make is that they do not consider how much coverage is actually needed when there is more than one person occupying the home. If you have roommates, make sure the coverage limit would cover all of your belongings. Creating an inventory is important to figure out how much coverage you need and for filing a claim if you ever have to do so. If your limit is not enough to pay for everyone’s stuff, buy more coverage.

Home Insurance

For the millennials who do own their own homes, homeowners insurance is even more important than renters insurance and is required if you took out a mortgage. If you’re not aware that you’re insured, contact your lender and find out who the carrier is on the property and what you’re paying each month. It probably went into escrow.

Switching Home Insurance Policies

That doesn’t mean that you can’t switch to a different company that may offer you the same coverage for a lower price. It all gets adjusted at the end, but it’s important to buy a new policy before canceling your existing home insurance coverage. Otherwise, your lender will find you in breach of contract. Also, just as with car insurance, a lapse in coverage will mean higher home insurance rates at renewal.

Renting Out a Room

If you own a home and are renting out a room, require the tenant to buy their own renters insurance policy because you’re only insured for your belongings. Speak with your mortgage lender to see if you’re required to carry a landlord policy for renting out a room. If you are, that policy is tax deductible. If you’re not, contact your insurance company to find out if the renter is covered or if you need to increase coverage or have them take out a renters policy.

Renting Out a Home

You will need a commercial landlord policy, and it’s advised that you require the renters to have a renters insurance policy. If you are using AirBnB, you may still need some coverage.

Whatever it is you’re doing, it’s a good idea to be on the same page with your insurer so there are no surprises if or when you file a home insurance claim.

Commercial Insurance

Roughly 13% of millennials own a business and need at least one or two insurance products to keep their businesses in good financial standing if a disaster strikes. Each business is different and will have different needs, and while the only mandatory type of commercial insurance you need is workers compensation (and perhaps commercial auto if you use your car for business-related activities), there are others which are essential to protecting a business from lawsuits and interruptions due to a severe storm, cyber and other types of crime and more.

General liability insurance is just one of many types of business coverage that business owners have to protect themselves, and a business owners policy, which bundles the most essential coverages at a better price, is one that fits the insurance needs of many small businesses.

Life Insurance

Buying a term life insurance or permanent life insurance the younger you are is less expensive. If you’ve been thinking about buying a life insurance policy and haven’t done it yet, now’s the time before the rates go sky high as a senior.

Term Life Insurance

If you have children and buy the less expensive term-life policy, make sure the term limits do not end before your child is independent. Also consider other bills like a mortgage or rent and housework. Ideally, both partners in a household will have their own life insurance policy to cover all bases in case one or both passes untimely.

Permanent Life Insurance

Buying a permanent life insurance policy can help you grow a savings account, but you will likely need to do a physical exam, which will determine your rate. You can also buy a permanent life insurance policy for a child, even a baby, to help create a college fund or a downpayment on a first home. They can cash it out when the time comes to use the money. A term life policy, however, does not have a savings component, only a death benefit.

Permanent life insurance can also help you create wealth, against which you can take out low-interest loans to start a business or make home improvements.