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Young Professional’s Guide to Insurance

9 August 2012 2 Comments

If you’re young and just starting your first “serious” or professional job, you might be wondering whether you need to protect your new earnings.

To start you off, here are a few general pointers about the kinds of insurance you might need as a young professional.

Life insurance

Whether you need life insurance as a young professional depends on a few things. Firstly, do you have any debts or financial responsibilities that could become somebody else’s “problem” if you were to die?

If you have a mortgage, for example, or a family and children depending on your income, it’s well worth looking into life insurance. If you haven’t bought a house or started a family yet, however, you may be able to get by without life insurance for a while longer. It’s worth considering, though, that life insurance will probably be much cheaper for you if you buy it while you’re young and healthy.

Critical illness cover

Critical illness cover is different from life insurance because you may wish to invest in it even if you don’t have financial responsibilities like a mortgage or children.

Critical illness insurance is designed to give a tax-free lump sum if you’re diagnosed with a critical illness covered by your policy. This money could help you if you’re left unable to work, or if you have to change your lifestyle because of your condition.

Just consider what you would do if you were left unable to work, and maybe needed constant care, because of a critical illness. If you’re not sure whether you would have enough financial support if this happened, it may be worth looking into critical illness cover.

Home insurance

Obviously, when you’re thinking about home insurance, it depends whether you live in your own home or not. If you’re living with your parents you probably won’t need to buy it yourself. If you own or rent your property, however, it could be important.

There are two main types of home insurance: buildings insurance and home contents insurance.

If you’ve taken out a mortgage it’s likely that your provider will have asked you to get buildings insurance before agreeing to lend to you – so that you have financial protection if your home is damaged or destroyed.

And whether you own or rent your home, contents insurance could be important. Some of your furniture, for example white goods, might be insured by your landlord if you rent your property – but if you’ve bought expensive items of furniture it may be worth insuring them.If you’re a homeowner, you’re responsible for all the items in your home, so it may be a good idea to find contents insurance that covers all your belongings.

Income protection insurance

You’re a young professional – which probably means that you’re depending on your own income to a certain degree. If you became unable to work sickness or accident, you’d need to think about how you’d support yourself financially. Income protection could cover your income for a certain amount of time if you’re left unable to work.

This could be especially important if you have financial responsibilities like debts, a mortgage or children. An alternative is mortgage protection insurance, which is specifically designed to cover your mortgage if you were left unemployed. This generally costs less than income protection, but it doesn’t usually cover any of your other financial commitments.

Guest Post by: Insurance agents at Home & Life.


  • Accountant Salary said:

    I notice that health insurance isn't on this list. Granted, young professionals probably don't suffer from as many medical conditions as older folk. But health insurance is necessary to pay for unexpected medical expenses, such as if you hurt yourself in sports, or get into an accident.

  • Fight Heat said:

    Yeah, insurance is important but you cannot always rely on insurance. For example, it is better to simply fireproof your house as good as possible instead of simply relying on the money from the insurance (although insuring the house would still be a good idea)