The twenties are a period of discovery, development, and beginning to become an adult as a separate person. As people trend towards short-term pursuits such as leisure, and career, it is equally important to protect our finances too. One of the most important steps to financial security is having the right form of insurance. Knowing what kind of coverage is required may help protect the future and set up a good base.

1. Health Insurance: A Must-Have

It is still mandatory regardless of whether one is young and seemingly healthy. Accidents, sudden illness or any other form of health complications can be very expensive and can clear all your money.

Options to consider:

• Employer-Sponsored Plans: If you are working, find out whether your company provides some health insurance to its employees. It is common for these plans to attract small premium rates.
• Marketplace Plans: Those who do not access health insurance through their employers may access various plans depending on their income through the insurance marketplaces.
• Parental Coverage: The Affordable Care Act allows you to remain on your parent’s health plan until the age of 26 years. 

2. Renters Insurance: Affordable Peace of Mind

Renters insurance is recommended if you live in an apartment or a house that you rent. This type of insurance helps cover valued possessions against loss from theft, fire, or water damage.

Why you need it:

• Liability Coverage: Liability Coverage: Liability insurance protects you in case you cause damage to the residence or if the occupants of your rented apartment get injured.
• Replacement Costs: If stolen or damaged, everything from electronics to furniture has to be replaced, and this is not cheap. Renters insurance guarantees you don’t use your hard-earned money. 

For instance, renters insurance is quite affordable, with policies costing between $15 and $20 per month.

3. Life Insurance: Planning for the Unexpected

Even though taking up life insurance in the 20s may not be viable, it is advisable for people with families, co-signers of student loans, and other dependents.

Life insurance types include:

• Term life insurance offers protection for a certain period, like 20 to 30 years, and is frequently more affordable for young individuals.
• Whole life insurance gives lifetime coverage and steadily rises in value, but the premiums are greater.

Keeping coverage as you age is simpler if you start early and lock in cheaper prices.

4. Auto Insurance: Required Coverage

Car insurance is compulsory in most states if you own or drive a vehicle. Over and above the necessity, it shields you financially from accidents or theft.

Important elements of vehicle insurance include:

• Liability Coverage: Pays for harm or loss you may inflict on people.
• Comprehensive and Collision: This covers the costs you may incur to fix your car after an accident, theft, or other acts of God.
• Uninsured/Underinsured Motorist Protection: Safeguards you if reckless drivers are underinsured.

First-time drivers’ insurance pricing is usually high, but there are ways to cut the cost, such as taking an accident-free driving discount, having multiple policies, or enrolling in defensive driving classes.