Insurance for Millennials: Tips to Protect Both Yourself and Your Stuff

LB Note: I am a ninja when it comes to certain financial topics, like earning more income or paying off debt. Other topics, like insurance and investing? I'm woefully clueless. So, today I'm posting a guest piece on insurance for millennials from renowned insurance expert, Todd Erkis, who details at a high level what you need to do in order to protect the things most valuable to you. Like me and my book on home ownership, Todd no longer works in the insurance industry and instead wrote a book on the consumer's point of view. Take it away, Todd!


Life is full of risks, even for those who try to live their lives as safely as possible. Everyone should evaluate their insurance needs on a regular basis – ideally annually – to make sure they have the right type and amount of insurance in order to hedge against these risks. This review is particularly important after a major life event such as a child moving out of their parents’ house, starting a new job, getting engaged or married, or having a child.

Evaluating one’s existing insurance policies can also save some serious money. One of the biggest mistakes people make with insurance is not shopping around, especially as prices vary from company to company. People can shop around using online comparison sites and quote generators, or by reaching out to an insurance agent, or insurance and finance experts to find the best insurance policies to suit their needs. But what if you don't even know where to begin?
In my new book, What Insurance Companies Don’t Want You to Know: An Insider Shows You How to Win at Insurance,
I discuss all major types of insurance and how to get the best price for them. There's also an action plan for identifying the insurance products a person needs and, just as importantly, the products they do not need.

Here are five quick tips on insurance for millennials for those who also feel a bit in the dark on what they need to be looking for:

1. Protect against the largest risks first

Insurance is designed to protect against financial ruin from an unexpected event. An estimated half a million people in the U.S. will file for bankruptcy this year alone. 1 According to a Harvard University study, medical expenses account for approximately 62 percent of personal bankruptcies in the U.S.Even if the possibility of something bad happening is small, insurance protection is an important investment to protect the future. Even though young millennials are just that – young and healthy – health insurance is a must in the event of a major illness or injury.

2. Don’t purchase unnecessary or unneeded insurance products

If a bad event will not lead to financial difficulties, then insurance is not needed. For example, parents probably don’t need life insurance policies on children, as the children are financially dependent on the parents. Instead, it’s the parents that need life insurance. Insurance should only be purchased to protect against significant financial risks, otherwise, it is a waste of money.

3. Young people need long-term disability insurance

One of the biggest mistakes young people make is waiting too long to purchase disability insurance. Some people receive disability insurance through their companies, but more and more jobs aren't offering long-term disability insurance. Sadly, some will get seriously sick or injured to a point they are unable to work for a long period of time. In fact, over twenty-five percent of today’s twenty-year-olds will become disabled for some period of time before they retire, 5and for someone who is twenty-five years old, the probability of becoming disabled before retirement is more than three times the probability of dying.For those who rely on their income to survive, which is pretty much everyone, long-term disability insurance is a must.

4. The minimum, legally-required car insurance is often not enough protection

Over 2.35 million people are in car accidents each year in the U.S.,7 and it’s important for people to protect themselves and their cars in the event of an accident. Most people don’t know that minimum car insurance policies only protect the other person in an accident; not the policy holder or their car. Unless people have enough money to replace their car if it’s totaled, they need more than just the minimum car insurance. Make sure car insurance is comprehensive and covers the policy holder, their car and the other car, should a collision occur.

5. Consider increasing the deductible amount on car and homeowner’s insurance policies

It’s a common belief that an insurance deductible increases the cost of insurance, but this is not the case. Many people will save money on their insurance by actually increasing their deductible. This is because the premium paid is lower, and people only need to pay the higher deductible amount if an accident occurs.


Insurance expert Todd Erkis is an FSA, CERA, MAAA, and professor of finance and risk management at Saint Joseph’s University in Philadelphia. Prior to becoming a professor, he spent more than 25 years as an actuary, developing insurance products and helping set prices for insurance. His bookWhat Insurance Companies Don’t Want You to Know: An Insider Shows You How to Win at Insurance, provides a guide to everything you need to know about insurance and is now available on Amazon.


“How Many People File for Bankruptcy Each Year,” Bankruptcy Truth. 29 Jun. 2016.

“Top 10 Reasons People Go Bankrupt,” The Huffington Post. 24 Mar. 2015.

“If you don’t have health insurance: How much you’ll pay,” 24 Apr. 2017.

4 “How to Buy Individual Health Insurance,” 13 Jul. 2016.

“You, Disabled? What Are Your Chances?” Disability Can Happen. 2015.

“Death vs. Disability,” Affordable Insurance Protection. 24 Apr. 2017.

7 “Annual Global Road Crash Statistics,” Association for Safe International Road Travel. 14 May 2017.

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  • Todd Erkis
    July 17, 2017 at 1:46 pm

    Hi Derek! Shopping around on a regular basis can save real money. The timing depends on the type of insurance. Car insurance companies want to attract good drivers and have low rates for new customers with good driving records. I would shop for car insurance every couple of years to make sure you are getting a good price. Make sure the coverage is the exact same so you have an apples-to-apples comparison. I would shop for homeowners at the same time as car as many insurers will offer a discount if you use them for both types of insurance. If you are relatively healthy, I would shop for term life insurance every 5 years or so. Life insurance prices continue to drop as life expectancies increase. Make sure you still need the life insurance as it is a waste to pay for insurance you don’t need. I hope you will consider purchasing my book. It has a number of tips to help save you money on insurance.

  • Derek @ Money by Dad
    July 16, 2017 at 8:57 pm

    Thanks for this post! Insurance is often something I have treated as a set it and forget it kind of thing in the past. It’s probably time to take a healthy look at everything as a whole again.

    How often would you recommend sitting down with an agent and reviewing your coverage whether it be auto, home, left, etc?