Stay positive, but prepare for the negative

No one really likes to think about their “what ifs” – that part of life that doesn’t go according to plan. And in your 20s, you’re still feeling pretty invincible, right? You don’t expect to get sick, become disabled, get in a car crash or be burglarized.

But life is unpredictable and although the odds of such losses are low, the impact can be life changing.

Insurance basics

Insurance is a way of getting you back to your original position so that your loss becomes manageable. Here are some situations that you might need to hedge against:

Car insurance. It’s mandatory if you drive so the key is to keep your premiums low. As you get older, your rates improve, so shop around. Showing stability gets you points. Building a good credit history and getting married are both signs of responsibility.

Health insurance. Our health care system is fairly comprehensive but there are still things that the government doesn’t pay for. If you’ve landed a job that provides health benefits, that’s great.

If not, buying your own health insurance is critical.

Tenant’s insurance. If you rent, your landlord probably has insurance that protects the building but not your possessions. Renter’s insurance protects your belongings in case of such things as fires, smoke and water damage, vandalism, and theft. It can also give you temporary housing and liability protection (if someone is injured on your property).

Disability insurance. The chances of your becoming disabled are fairly low at your age so premiums should also be low. But if your workplace has injury hazards, consider disability insurance – especially if your employer does not provide it.

Life insurance. If you have family that would face financial problems if you were to die, then you’ll need some life insurance. Speak to your advisor about the type of insurance that is best for your situation.