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Contact: Press Offices
New York: 212-346-5500; media@iii.org
Wash. D.C.: 202-833-1580

NEW YORK, March 23, 2004 - You are part of the work force and out on your own. Now is the time for a single person to start establishing a solid financial foundation. ÐÓ°ÉÔ­´´ should be included in the mix.

It's important to understand what affects the cost and availability of insurance so you make the right decisions early on, says the ÐÓ°ÉÔ­´´ Information Institute (I.I.I.).

"If you have an accident or too much credit card debt an insurance company may see additional risk, making it more difficult to get coverage at the best possible price," says Alejandra Soto, spokesperson for the I.I.I.

"Conversely, if you take care of yourself and protect what you own, insurers will see good insurance risks and are more likely to compete for your business," she adds.

HOME AND RENTERS INSURANCE

Renters often make the mistake of thinking that the landlord's insurance covers their possessions in case of a fire or other catastrophe. Not true, you need your own insurance. Relatively inexpensive, renters insurance protects the things you own and provides liability coverage. It also helps you establish a good insurance track record, or loss history. If you show that you are a responsible insurance risk, you'll have no trouble getting insurance when you eventually buy your own place.

If you live in a condo or coop, you depend on two insurance polices for protection: your own coverage and the insurance purchased by the condominium or co-op board for the common areas of the property. Read the association's bylaws and/or proprietary lease to better understand where the association's responsibility ends and yours begin.

If you're buying a home and have a mortgage, you will need to purchase homeowners insurance. The cost will vary according to the size and construction of the home, its location, fire and safety features, anti-theft devices and the property's loss history. Insure your home for the cost of rebuilding it, not the market price. And make certain that the value of your insurance policy is keeping up with increases in local building costs.

AUTO INSURANCE

The cost of auto insurance depends on several factors: prior claims, driving record, and the type of car and how many miles you drive. Also, a car that is popular with thieves or is expensive to repair will cost more to insure. You can lower your insurance premium by raising the deductible, installing anti-theft devices, and dropping collision coverage if it's an older car.

HEALTH INSURANCE

Once you are out of school or older than 23, your parents' health plan won't cover you any more. As you look for a job, inquire about health coverage. Many companies have coverage through a managed-care plan, which means that a certain group of physicians are included in the network. Other plans allow employees to choose their physicians. In both cases, the employee is responsible for a co-payment which helps keep costs under control.

LIFE INSURANCE

When you are young, your life expectancy is high, which means the cost of life insurance is low. Life insurance becomes increasingly important if you have others who depend on you, including aging parents.

DISABILITY INSURANCE

When we are young, we feel indestructible, however, at this stage we are four times more likely to be disabled than die. Many employers offer an option of disability coverage, which provides for lost income if you are injured as a result of non-work activities and unable to work. If the injury is work-related, then workers compensation coverage applies.

LONG-TERM CARE

The good news is we are living longer. The challenge is caring for an aging population. Increasingly children serve as guardians for their parents as they age. There are many options for custodial care, ranging from in-house care to nursing homes. As a general rule, the earlier you consider buying long-term care coverage, the cheaper it will be.

FINANCIAL PLANNING

You may not be making a lot of money, but it's probably more than you've had before. You have an apartment to furnish, a wardrobe to build and perhaps student loans to pay off. It's also important to save money. Most financial experts emphasize that it is vital to save or invest early in life and keep it up during peak earning years. Put some money away regularly, even if it is only a small amount. This can be a rainy day fund or be for a specific purpose, such as a down payment on a home or car. If your employer offers a 401(k) with matching funds, sign up for the maximum you can. It's "free money."

At this point, it's also important to know what not to do. Living within your means is important. Maintaining a good credit rating will help you get the best rate when you apply for a home or car loan. It can help you get a better job or apartment. It can even save you money on your insurance.