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Why Insurance Isn’t A Scam (Even If It Feels Like One)
You’re not being dramatic—insurance can feel like burning money. But it’s also the most underrated tool to protect your future self and family (and most importantly, your bank account’s livelihood). It’s one of those things you don’t realize you need...until you really need it.
Richard Yoon & Mitch Duffy
August 20, 2025
Let’s Clear The Air On Insurance
Whether you’re #TeamJustTurned26 and got “kicked off” your parents’ plan, or you’re just trying to decode why insurance feels like a subscription you never signed up for—newsflash: Insurance != scam so this is something you can’t keep living in denial of, that’s why we are here to walk you through it. It’s your financial safety net for adulting, there to catch you when life stops pulling punches and throws everything it’s got at you—like a surprise ER visit or your phone pulling a tragic swan dive onto the sidewalk.
Find What Your Looking For Here
Insurance 101: Key Terms You’ll Actually Hear
Now, now, before we dive into what you should be looking to buy, here’s your cheat sheet for decoding the jargon:
Premium
Your monthly “subscription fee” to keep the policy active.
Deductible
The amount you pay out-of-pocket before insurance starts covering costs. Think of it like the cover charge before the bar lets you in, except all the drinks aren’t covered by the bar, like how this works for insurance...
Copay
A flat fee you pay for certain services (like $20 for a doctor visit)—you’ve probably experienced this after your usual doctor appointment.
Coinsurance
Your share of costs after you hit your deductible (e.g., insurance pays 80%, you pay 20%). It’s like going Dutch on a medical bill.
Out-of-Pocket Maximum
The most you’ll pay in a year. Hit this, and insurance covers 100% (WOOHOO!) of covered expenses after.
Why it exists: It’s your financial fail-safe. Its entire job is to prevent a single bad year—a cancer diagnosis, a major accident, crippling chronic pain—from causing total financial bankruptcy—you can thank the Affordable Care Act for this (ACA). You pay up to this point, and then the insurance company has to step in and do what you’ve been paying them to do: cover the catastrophic stuff.
To state the plain for those folks who need full words to know what I am hinting at: The silver lining? If you've reached your maximum, use it! This is your cue to go on a medical spree. Book every appointment you’ve been putting off—that dermatologist visit, physical therapy, a crown, new glasses—because it won’t cost you another dime. (FYI: hitting your max means you’ve already spent a small fortune, so it’s a benefit to use, not a goal to strive for.)
Beneficiary
The person who gets the payout if you die (for life insurance).
Exclusion
The “nope list” of what your policy won’t cover (like cosmetic surgery, experimental treatments, and acupuncture unless conditions are met).
The 4 Types Of Insurance You (Actually) Need In Your 20s
Health Insurance
Even if you’re fit as a fiddle, one ambulance ride + ER trip = thousands of dollars before you even get to the designer blue backless dress (a.k.a. The hospital gown).
Options usually include:
Employer-based coverage (often with employer contributions—like retirement)
Student health plans, if you’re in school
Marketplace plans you buy yourself
The 411 on staying on your parents’ plan:
You can stay on a parent’s job-based plan until you turn 26.
If you’re on their Marketplace plan, coverage typically lasts until December 31 of the year you turn 26.
This applies no matter if you’re married, live alone, are in school, or are financially independent.
Dental Insurance
Cheaper than you’d expect, and a total no-brainer. Avoid surprise bills for fillings or crazy wisdom tooth surgery.
“You only get one set of teeth your whole life” — 🤓 (The nerd is right. Listen to the nerd.)
Renters/Homeowners Insurance
Think it’s unnecessary? Your stuff is (probably) worth more than you think.
The national average for renters’ insurance ranges between $12 and $23/month, and is heavily dependent on coverage, location, and whether you have good or bad credit.
— Per NerdWallet: “The Average Renters Insurance Cost”
It covers: Your personal property, liability if someone gets hurt at your place, and even living expenses if your rental becomes uninhabitable.
Sidebar: A friend of mine got bit by a dog at a family friend’s house as a kid…and their homeowners’ insurance paid out $100,000. Liability is a big deal.
The Fine Print:
Standard policies rarely cover floods or earthquakes—you’ll need separate policies for Mother Nature’s epic tantrums.
Some policies might cover fire caused by an earthquake, but the actual “planet quaking” part? Never.
For these disasters, you need specialized programs like the National Flood Insurance Program (NFIP) or the California Earthquake Authority (CEA) to get the real coverage.
Splitting with roommates? Get your own policy. It simplifies claims and prevents post-disaster drama.
Ask your landlord what they already cover—you might not need double coverage.
More info on Renters’ Insurance and a free quote calculator — Forbes
Auto Insurance
If you drive, you legally must have at least liability insurance (which covers the other person’s damages).
The exception: New Hampshire. But you still have to prove you can pay for accidents you cause.
Liability is the legal minimum; full coverage makes sense if your ride is worth more than a pile of scrap metal that hums like a lawn mower.
Optional But Smart: Phone/Electronics Insurance
Accident-prone? Refuse to buy a chunky case because the
~universal laws of aesthetics~ prohibit it?
AppleCare or similar plans pay for themselves after just one cracked screen or tragic coffee spill.
It’s hard to justify the extra cost, but you’ll be grateful when you leave your phone on top of the car and it turns into roadkill when you drive away
(speaking from experience…)Bonus Tip: Some credit cards (like the Chase Freedom Unlimited, Amex Gold Card, or Capital One Venture X) offer built-in purchase protection for new electronics. Check your benefits!
👉🏽 Do you want to find a card like this with great benefits AND protection, or try to boost your credit score to save on insurance?
Hit up JoinLuci.com for personalized credit card recommendations to send your credit score “To a whole notha’ level” made for people just like you and me. |  |
Bonus Coverage Types Worth Considering
Life Insurance (Term & Whole):
In a nutshell, it’s a financial payout (called a “death benefit”) to your chosen person (a beneficiary) if you die. It’s typically used to replace your income, pay off debts (like a mortgage), or cover final expenses (such as a funeral) so your family isn’t left with the bill on top of the grieving process.
Not just for parents or homeowners. Planning to leave a safety net?
Term Life: Cheap and simple—like a budget subscription for your family. Covers you for a set period (e.g., 10-30 years). Outlive it? POOF—no payout. So, frequently check if you need to renew or adjust it.
Whole Life: The lifetime VIP pass—as long as premiums are paid (which stay fixed). It’s covered for life and part of your premium builds a cash value (tax-deferred growth) you can borrow against (kind of like a retirement account in a sense). It’s much more expensive but acts as a forced savings account.
And for dessert: If the insurer does well, some policies even pay dividends.
Choose based on your budget, how long you need coverage, and whether building cash value is a goal.
Disability Insurance
Replaces part of your income if injury or illness keeps you from working. Younger = cheaper rates. Even if you’re healthy, think about it—one surgery (like a double knee replacement) could put you on injured reserve (IR) from your job for months, and this coverage keeps the bills paid while you heal.
How To Save On Insurance (Without Sacrificing Coverage And Your Sweet Sweet Fun-Money)
Shop around & compare yearly. One insurer’s “excellent rate” could be another’s “overpriced scam.”
Bundle your policies (e.g., auto + renters) for a sweet multi-policy discount. — we’ve all seen those insurance commercials about bundling…
Raise your deductible to lower monthly premiums—just make sure you can actually afford that deductible if disaster strikes.
Read the fine print — know what you don’t get.
Your basic policy might exclude things like floods, and your health insurance is a whole other beast.
Think your Health Insurance plan will cover that Kardashian-inspired lipo or a “new-wave” pharmaceutical butt-lift? Think again. It’ll reject cosmetic procedures faster than a Hollywood A-lister denies plastic surgery.
It also won’t cover anything deemed “experimental” (sorry, no mutant powers yet), and “alternative wellness” like acupuncture is often only covered if you jump through more hoops than a contestant on The Bachelor.
💬 Protect Yourself
Insurance may feel like you’re torching money that could’ve gone to concert tickets or a killer vacay. But when life smacks you with a medical crisis, a stolen bike, or a laptop meets concrete a little too intimately, it magically transforms into your ultimate lifesaver (and wallet-saver). So protect your stuff, protect your peace of mind, and most importantly, protect your wallet. Nobody knows what the future holds—that’s what makes life awesome but also wildly unpredictable. Until Next Time, Mitch |  |
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