I'm pleased to present a guest post dealing with insurance - one of the many financial issues parents and students need to think about as they transition from home to independence.
College students are tomorrow’s best consumers. Because college graduates tend to make significantly more than high school graduates, it is likely they will have more money to spend over the course of a lifetime. That is why so many companies spend time, effort and financial resources courting their business.
As any parent knows, transitioning from child to self-sufficient adult is a challenge. Although it is still possible to piggy-back children on the credit history of parents, eventually, children must strike out on their own. College is one of the best places to do that. In an effort to capture these potentially lucrative future customers, many companies are willing to overlook the fact they usually have no credit or bill-paying history of their own. So this is a good time to establish accounts for the kinds of products and services that will, ultimately, be necessary. Insurance is one of the most important.
Vehicle insurance – If a college student has a vehicle, this is a good time to establish an individual account. A good driving record will result in a less expensive premium.
Renter’s insurance – Make no mistake, colleges are not safe places. There are those who rely on the “college atmosphere” to move about, undetected, while they find out where the neatest toys are. Chances are, your college student has a fancy cell phone, flat screen television, expensive laptop, and a host of other electronic gadgets that are easy to steal then sell or pawn. While it is possible to add a student to the family homeowner’s policy, that can present some problems. Claims will go against the family policy, and the deductible may be unmanageable considering only belongings are covered at the student’s residence. While it may cost more, renter’s insurance will address the real need for coverage. It also lets the student establish an insurance account that can translate to a full homeowner’s account in the future.
Health insurance – Chances are, at least for the time being, children are able to stay on their parents’ health insurance policy until their 26th birthday. Regardless of the reason, if this is not the case, purchasing a health insurance policy is critical. While many colleges assess a student health fee, it is good for very little. It may provide a doctor’s visit for a cold or dressing of a minor wound, but anything serious is going to be referred to a hospital or regular doctor.
Life insurance – If your child is not already covered by one of the many life insurance policies designed to grow with a child, this is a good time to start one. A child in good health should have no trouble getting a good rate especially if the individual does not smoke and is at a healthy weight. While it may seem that term life is appealing because it appears to be so inexpensive, the purchaser of such a policy must pay forever and no cash value is ever accrued. This is a good time to look at different kinds of policies that will provide an investment and future but might not require the kind of financial investment associated with whole life insurance.
Identify theft insurance – There is probably no other community with a higher percentage of tech savvy people than a college campus. With a highly mobile population, identity theft may be not only more likely, but college students probably pay less attention to their accounts than those who have already encountered the problem on a small scale.
There are other kinds of insurance, but once an individual has an established financial life, these kinds of policies can be added if there is a need. The basics are enough to protect college students and keep them safe, and that is the purpose of considering insurance.
Ellen Langford is a work from home contractor for KeyInsuranceQuotes.com and a mother of two college students. She has heard the horror stories and makes sure her own are safe.