Life can be unpredictable, and that’s what keeps it interesting.
But sometimes the unexpected costs a lot:
- Like if someone broke in and stole your laptop while you’re at the cafeteria.
- Or if that nagging toothache went full-blown abscess, requiring a root canal.
- Or if you got rear-ended on your way back from Thanksgiving break.
I could go on, but you get the idea. Unless you’ve eliminated all risk from your life, it’s possible something bad could happen, even when you’re in college.
Insurance exists to shield you from these unexpected costs, but this doesn’t mean college students need the same kind of insurance as everybody else.
By finding insurance coverage that best fits your specific needs as a college student, you can save money and get protection that won’t leave you exposed when you most need coverage.
Types of Insurance College Students Need
Life Insurance for College Students
We’ll start here because this topic is no fun to talk about. What would happen if you died unexpectedly while in college? Of course, your family and friends would be devastated, but what about your finances?
Forbes reports that the average college student graduates with over $30,000 in student debt, and that’s just for an undergraduate degree. Students earning advanced degrees often borrow much more.
That same study suggests that over 2 million students from the class of 2018 have accumulated over $100,000 of student debt.
If a parent or someone else co-signed on your loans, they may be responsible for paying them back if you aren’t around to do it, especially if they are private (not federal) loans. The same may be true if you have a car loan someone co-signed on.
How It Works
Life insurance coverage could cover these debts so your grieving co-signer wouldn’t have to. Here’s how it works:
- Find a life insurance policy with enough coverage to pay your debts.
- Choose a beneficiary, which is the person who would receive the policy’s coverage if you died. Make sure it’s someone you trust.
- Pay the premiums each month (or each quarter or year, depending on how you set it up).
- If you died, your beneficiary would receive the policy’s coverage, tax-free, and could use it to pay off your loans, pay for your funeral, etc.
Types of Life Insurance
Life insurance policies come in many forms but they fall into two broad categories:
- Whole policies which last the rest of your life.
- Term policies which last for only a specific period of time.
Since a whole (sometimes called a permanent) policy lasts the rest of your life, it would cost a whole lot more for a college student. Plus, as a college student, you probably don’t know how much insurance you’ll need over the coming decades, so it’s not a good time to make a permanent decision.
Most (all?) college students will do best with a term policy.
Other Factors to Consider
That’s not the end of the decision making. You’ll need to decide:
- How much coverage to get?
- How long you’d like to keep the coverage in place?
Be sure you’re getting only the coverage you need. Life insurance policies can be huge — a couple million dollars kind of big. You don’t need to go there.
If you have $75,000 in student loans and owe $20,000 on your car, and you expect this debt to be paid off within 10 years, a 10-year policy of about $100,000 would cover your needs.
If you’re young and healthy you should have access to the best term life rates out there — possibly as low as $10 a month. But don’t expect your insurance company to take your word for how young and healthy you are.
Applying for Life Insurance
The company will want to know more so it can know for sure what kind of risk your policy would present. So when you apply for coverage, expect some personal questions.
You will be asked about:
- Your personal health history
- Your family’s health history
- Your hobbies and habits
- Your job or volunteer work
- Whether you smoke, vape, or use other tobacco products
You’ll most likely need a medical exam, too, to confirm your health information. This can seem like a big hassle, and it can be tempting to jump at a policy that promises no health exam.
But be careful; you can end up paying a whole lot more for no-exam life insurance because the insurance company doesn’t know the risk you present.
No exam insurance is not medically underwritten, which is why it costs more. You can find medically underwritten life insurance that doesn’t require a medical exam, especially if you’re young and healthy. We’ll get into that in our company ratings below.
So, how do you find the right policy for you?
- For starters, you’ll need to get quotes.
- You could also talk to an independent agent who has knowledge of the industry but isn’t committed to a specific company.
- Or, in some cases, you can buy a policy online, directly from an agency or insurance company.
Life insurance is personal. There’s no one-size-fits-all approach, and there’s no way to make across-the-board recommendations for which company to use. But, generally speaking, I think these companies would work well for college students:
Best Life Insurance for College Students
I mentioned above, it is possible to find medically underwritten life insurance without getting a medical exam. It’s still fairly uncommon, but Haven Life, an all-online agency that sells Mass Mutual policies, can do it.
Only the healthiest applicants can get no-exam, medically underwritten coverage; others will still need an exam.
Even then, Haven Life has a lot to offer, including quick decisions and seamless online access to the buying process and customer service.
Banner Life is another easy-to-use insurance company that offers great rates, including lower prices for people who are younger and conscious of making the best health decisions.
If you ask for vegan options in the cafeteria and like to run 10Ks in your spare time, Banner Life can probably save you some money. The company offers more than just term life, so be sure you’re getting a quote on a term policy.
This one might seem a little random, but I mention it because Minnesota Life excels with 5-year term policies, which are uncommon. Most companies offer term life policies for 10 or more years.
You never know what might change after college: Marriage? Kids? This will change your life insurance needs, too. Sure, you could just replace a 10-year policy with something bigger. But a 5-year policy would cost a little less in the short run. It’s an approach worth thinking about.
Health Insurance for College Students
Best case scenario, your health care spending in college will include only routine check-ups and over-the-counter allergy or headache medicine.
But what if you come down with appendicitis and need surgery, plus a night in the hospital? It’s possible to rack up six-figure medical bills that can take years, or even decades, to pay off. Enter health insurance. It’s much-maligned in this day of ever-increasing medical costs.
But there’s still no better insulation from the havoc these costs can wreak on your financial future. Along with being sensible, it’s also the law. So what are your health insurance options as a college student?
Options for Health Insurance
You may be able to:
- Stay on your parents’ insurance plan
- Get insurance without paying a premium through Medicaid
- Buy into your college or university’s health plan
- Buy your own plan through the Marketplace
- Buy your own plan from an insurance provider
Why You Might Already Have Access to Health Coverage
First off, if you can stay on your parents’ or guardians’ health insurance plan, that’s a no-brainer. You should do it. (The Affordable Care Act requires family insurance plans to cover children younger than 26.)
If for whatever reason this won’t work for you, Medicaid might be an option. In some states, you can qualify for coverage if you earn less than 133 percent of the poverty level. For an individual, that would equal $16,146.20.
It’s possible for a college student to fall below that level, especially if you’re not a dependent on someone else’s tax form. Other states have stricter criteria for qualifying for free health care. You can learn more here.
Buying Health Insurance Coverage That Fits
For many college students, though, the only way to get health insurance is to buy it. For college graduates, this is even truer.
Before buying coverage, it helps to know how health insurance works so you can be sure you’re getting coverage that fits your life and your monthly budget.
Your plan’s premiums will be a big part of that, just like with life insurance.
But also pay attention to the other costs, including:
- Co-payments you make to a physician’s office or pharmacy
- Deductibles you must meet out of pocket before an insurance plan kicks in
- Annual maximums a policy will pay
- Extra charges or non-payment for out-of-network doctor’s visits
These charges interact with each other to determine your true cost for health care, and you should make sure these costs balance out to match the way you live.
For example, a policy with higher deductibles should have a lower monthly premium, making the policy less of a burden each month if you’re low on cash.
With a catastrophic plan, your insurance would kick in only if something catastrophic — that likely required hospitalization — happened. For many college students buying their own health insurance, catastrophic coverage will likely do.
How to Buy a Health Insurance Policy
When you’re ready to buy a health insurance policy, you have a few different options:
- Buy through the Health Insurance Marketplace which the Affordable Care Act created
- Buy your own policy through an agent or directly from an insurance company
- Buy into your college or university-provided health insurance
The last option, buying your school-issued insurance, may be your easiest route to coverage. In fact, it may be automatically included in your enrollment package and billed to your student account.
If that’s the case, you’ve got this covered. If not, you’ll need to move on to another option.
Buying a health plan through the Health Insurance Marketplace has some advantages:
- Based on your income you could save big on premiums through tax credits
- It’s easy to access coverage through the government’s Web site
- You can keep your coverage if you drop out of school
- You won’t be using student loans or other financial aid to pay for health insurance
But this is possible only during Open Enrollment (unless you qualify for special enrollment). Open Enrollment usually takes place from November to mid-December. On the other hand, buying your own plan from an insurer (such as Blue Cross Blue Shield or Aetna) could offer you lots of health plans and savings if you don’t qualify for tax subsidies.
Recapping Health Insurance for College Students
You need health insurance to shield yourself from out-of-control health care expenses that may result from an unexpected illness or accident. If you can get insurance without paying, either through your parents’ plan or Medicaid, do it.
If not, look into your college’s health plan if it has one. If that’s not an option, try to save money through the Health Insurance Marketplace. If you can’t save that way, look into a plan from an insurance provider.
Car Insurance for College Students
Anyone who’s been driving for a few years already knows why car insurance is a must. Wrecks happen, and without insurance, you could be on the hook for the cost of car repairs and personal injuries.
Then there’s the fact all states (except New Hampshire) require auto insurance. But what kind of car insurance works best for college students?
Auto insurance covers some pretty broad issues related to driving:
- Liability — If you hit someone, this coverage will pay to fix or replace that driver’s car and pay the driver and passengers’ medical bills. It will not cover your car’s damage or your health care bills. States require a minimum amount of liability coverage.
- Collision and Comprehensive — This pays for your own needs after a wreck (collision) or other damage to your car that results from something like a break-in or a fallen tree (comprehensive). You have more control over this coverage, and you’ll probably have a deductible. If you owe money on a car loan, the finance company may require a certain level of coverage.
- Personal Injury Protection — This is for your own and your passengers’ medical expenses, lost wages, and even funeral costs. This kind of coverage is not required by all states.
- Uninsured or Underinsured Protection — This is for your own property damage and personal injury if someone who is not insured (or is underinsured) causes a wreck that damages your car or your health; also not required by all states.
Each state has its own auto insurance regulations, so if you’re going to college in a different state, you may need to adjust your current insurance. When you’re dealing with a larger company such as Nationwide, Amica, State Farm, GEICO, etc., that’s easy enough. A phone call and a signature may suffice.
But if you have insurance with a smaller company who doesn’t insure cars outside your state, you may need a new policy in the state where you’re attending school. And even if you already have a policy, it’s possible you can save money with a policy that’s designed for college students and young adults.
Best Car Insurance Companies for College Students
A lot of car insurance companies offer special programs for students. Here are some of my favorites:
Amica’s Good Student Discount can save you 25 percent if you keep a 3.0 GPA, and it also offers a Good Driving Discount. These discounts apply only if you’ve been accident-free for the past three years.
Amica even has a special rate if you don’t drive while you’re away at school but do drive when you’re back home.
GEICO has a Good Student Discount, too. If you’re between 16 and 24 and have a B average, you can claim a 26 percent discount on your premiums.
The company has discounts for good driving and an Accident Forgiveness program in most states. You have to do more than earn good grades to get these discounts, though.
Like Amica and GEICO, Esurance has a student discount program for students with a 3.0-grade point average or higher.
Esurance also offers smaller discounts for buying insurance online and for paying in full, instead of in installments, for your policy.
How Much Auto Coverage Do You Need?
You can save money by getting insurance which meets only your state’s minimum requirements, but remember:
If you don’t have enough insurance, you are personally responsible for car repairs, hospital bills, and lost wages that you cause in an accident. If you have $20,000 in liability, for example, and cause $50,000 in damage, you could be sued for the other $30,000.
If you can’t pay it, the court could sell your property to cover the costs.
Scary stuff. Still, as a college student, you don’t want to overpay for anything, and that includes car insurance.
So let’s look at each component of auto insurance individually:
- Personal Injury Protection (PIP): If you already have enough health insurance, you should be OK without investing a lot here. Stick with your state’s minimum.
- Collision and Comprehensive: These two components cover your own property. You can get higher deductibles here and save on your monthly premiums. But you don’t want a deductible that’s too high. Why have coverage if you can’t pay the deductible that unlocks it?
- Liability: Don’t skimp here. Even if your state requires a low amount of coverage, remember that you’d be liable for what your insurance doesn’t cover. The average car is worth about $20,000. A hospital stay can easily cost $100,000. If you hit a car with multiple passengers, medical bills could be several hundred thousand dollars. Get coverage that reflects this reality.
- Underinsured or Uninsured: This is an inexpensive add-on, but a game-changer if you needed it. I’d add it on.
- Extras: A lot of insurers offer extras like roadside assistance or towing insurance. I’d skip on this and just join AAA if you’re worried about getting stranded.
If you can’t afford hefty coverage on your own car, find a way to properly cover your liability in case you cause an accident. If the worst happened, you’d be glad you did.
Dental Insurance for College Students
Dental insurance might not seem like a big deal, until you need a root canal or a crown or a wisdom tooth extracted. Without dental insurance, you may be stuck trying to explain, with a swollen jaw, why there’s no way you can pay for the procedure the dentist just finished.
At that point, the office manager may bail you out by handing you a brochure for a medical credit card. If your credit holds up and your application gets approved, you can transfer the balance to the card on the spot and head back to campus with your dignity intact.
But the sense of relief lasts only so long. The health credit card bills start coming, and the interest rate is high. If you’re prone to dental, periodontal, or endodontic troubles, dental insurance may be a must.
Even if you aren’t, preventive care can prevent costly procedures, which is why many dental insurance plans cover 100 percent of preventive care.
How to Get Dental Insurance Coverage
Just like with health insurance, if you can stay on your parents’ dental insurance plan, you should. If not, see if your college or university’s insurance includes dental.
If you qualify for Medicaid, you can go that route, although many dentist’s do not accept Medicaid patients. If you can’t access coverage in those ways, you may want to buy your own plan, and the average cost for an individual plan is about $25 to $30 a month.
Yes, that’s a chunk of change that could go a long way at the grocery store or the gas pump.
But when you consider the cost of even the most basic, preventive dental care, the cost is worthwhile.
Along with paying for preventive care, a typical plan pays 80 percent of routine procedures such as root canals and fillings while paying around 50 percent of more advanced procedures such as a crown.
You’ll likely have an annual cap on payouts, so plan your procedures, if possible, to avoid too many dental visits in one year.
Other things to consider when shopping for a policy:
- Waiting periods: A lot of individual policies require you to wait six months before they will pay on a procedure. So if you want until you really have a dental emergency before buying insurance, you may be limited in your options.
- Deductibles: Like a lot of insurance policies, keep an eye on your deductible and make sure you can afford to pay it when needed.
- Enrollment fees: Many policies require an up-front enrollment fee of $35 or $50.
- Type of plan: If you get an HMO plan, you’ll be limited to certain dentists. A PPO is more flexible but may offer lower rates within your network of providers. If you have a dentist you like, make sure he or she is part of your insurance network before buying the plan.
Alternatives to Dental Insurance
If there’s no way you can afford dental insurance but want to protect yourself from costs resulting from unexpected dental work, consider:
- The Quality Dental Plan program: Participating dentists charge an annual fee in exchange for preventive care and routine work. See if there’s a participating dentist near you.
- Ask your dentist for an installment plan: It’s totally up to the dentist, and he or she would probably prefer you use a medical credit card, but it never hurts to ask. Preventive care can prevent a lot of the most expensive dental procedures.
- Free dental clinic: see if there’s one in your community.
Renters Insurance for College Students
It’s a common misconception: As a college student without much income, you don’t have to worry about someone breaking in and stealing your property. But you probably have a laptop, maybe a bike, a smartphone, a nice Bluetooth speaker or a turntable for your vinyl collection.
That’s why student communities are often the busiest part of town for police officers responding to break-ins. Renters insurance offers a simple and affordable layer of protection for your belongings.
An average policy costs about $12 to $15 a month and covers on average $30,000 in property and up to $100,000 in liability in case someone gets injured in an accident in your apartment or yard.
Renters insurance FAQs
Renters insurance is one of the simplest kinds of insurance out there, but there are still some interesting variables.
Here are some frequently asked questions:
Q. Doesn’t my landlord have insurance?
A. Yes, most likely so, but your landlord’s insurance protects your landlord’s property, not yours.
Q. I live in on-campus housing. Do I need renters insurance?
A. Maybe not. It’s possible your parents’ homeowners insurance will continue to protect your belongings on campus. But check to make sure, and also see what caps your parents’ policy places on away-from-home claims.
Q. My roommate has renters insurance. Can’t we share a policy?
A. Yes, you could go in together on a policy and save money, but this has some downsides. Claims to replace your roommate’s property could affect what you pay in future premiums, for example. Also, if your roommate fails to pay her share of the policy, it puts your coverage at risk even if you paid your share.
Q. Will renters insurance help even if the damage resulted from landlord negligence?
A. Yes, even if your landlord is at fault (think an electrical fire that damages your property) your renters policy can help you replace your belongings.
Q. What natural disasters will renters insurance not cover?
A. Most renters policies make exceptions for floods and earthquakes. If you live in a flood-prone area or in Southern California (or anywhere with a history of earthquakes), keep that in mind. Also, renters policies are reluctant to pay for damage from a sewer system malfunction or basement flooding.
Q. Does a renters policy cover all my belongings?
A. Not necessarily. If someone steals a valuable collectible item, such as rare jewelry or a Derek Jeter rookie baseball card, a standard renters policy probably won’t help. Ask your agent to find out for sure before buying a policy. Additionally, expect caps on long-term expenses such as rent at another apartment while yours is being repaired in the event of a flood or fire.
Q. Do I have to pay for liability insurance as well as protection for my stuff?
A. No. Although these components tend to be paired, many companies allow you to buy one and not the other. If you live alone and never have parties and rarely have guests, buying a lot of liability insurance won’t make much sense.
Q. What other factors could drive up my premiums?
A. If you live in a neighborhood with regular break-ins, renters insurance may cost more. Also, if you have a lower credit score (below 650 or so), your insurer may charge more.
Where Do I Buy Renters Insurance?
Most large, national insurers offer renters insurance policies.
In fact, your car insurance company may be able to save money by bundling a renters policy in with your auto insurance. You can also shop online.
Other companies to consider include Esurance, GEICO, and Progressive.
Travel Insurance for College Students
Travel insurance is probably one of those things you’ve never thought about needing, but the reality is, it’s one of the best insurance policies a college student can take out, under a few conditions.
If you’ve ever gotten sick or injured on a trip and had to venture to the hospital unexpectedly, you know it can put a damper on your travels. Or maybe you’ve lost your luggage or had your room robbed.
Travel insurance can help to protect the time, money, and effort you’ve put into a trip, so if the unexpected happens, you’re covered.
Who Needs Travel Insurance?
First things first, let’s decide whether you actually need it or not.
Travel insurance is ideal for college students who are studying abroad.
A semester or two is a long time, and you never know what could happen. Travel insurance can grant you peace of mind and protect the money you’ve put into your overseas studies.
College is a time where you have a lot more freedom to roam for extended periods of time (take advantage of those extra-long Christmas and summer breaks while you can), leading to lots of trips abroad.
If you’re planning to backpack across Europe for a month (or more ) with your roommates, you might want to seriously look into securing a travel insurance policy as well. On the other hand, if you’re traveling with your family for a week or two, you may not need the coverage a travel insurance policy supplies.
What It Covers
Some of the most common coverages of travel insurance are medical coverage, trip cancellation, theft protection, luggage insurance, evacuation coverage, and emergency services.
The criteria for most of the services above are pretty obvious, except for trip cancellation.
When it comes to canceling your trip, you’re likely to be covered for job loss, losing your passport to a natural disaster or theft, evacuation in the country you’re visiting, documented injuries or illness, deployment, or jury duty.
If, however, something goes amiss causing you to cancel your trip while you’re intoxicated, you break the law, or engage in high-risk activities, your cancelation probably won’t be covered. You also won’t be covered for your pre-existing conditions or if you’re going on a trip for medical purposes.
Bottom line: travel insurance is a good investment if you’re planning more than a short-term trip. Look into it especially if you plan to study abroad!
Finding and Keeping that Delicate Balance
Most college students spend money carefully.
If your 12-year-old used car will run a few more years, you keep it, even if you can no longer roll down the window. If you can save a few hundred dollars on rent by having an extra roommate, you clean out that spare room.
It may seem impossible to find space in this delicate balance for insurance premiums, other than those mandated by law.
But that’s just the thing: The more delicate your monthly budget, the more vulnerable you are to the kind of unexpected expenses insurance can protect you from.
So shop around for the kind of protection that meets your needs, and find some room in that budget somewhere.
The unexpected comes out of nowhere. If you’re prepared, you can keep your balance.