Monday, April 21, 2008

Insurance, I Bonds, and Adulthood

I went by the office where my mother works to get a quote on short-term health insurance. I'm covered under my father's group plan until I graduate, and I'll be covered through my employer in the fall, but I need to figure out what I'm going to do about this summer. COBRA seems awfully expensive so I'm pretty sure I'll opt for an individual short-term high deductible policy instead. Do you have any great suggestions for where to research my options or caveats I should be aware of?

After that I headed to the bank. Like Ms. Miniducky, A, and many other bloggers, I've been toying with the idea of moving some money into I Bonds since interest rates keep dropping and inflation seems likely to rise. I purchased one paper $50 I Bond in 2005, and I don't see a lot of benefits to messing with the hassles of getting set up for Treasury Direct when a ten minute visit to my bank will accomplish the same thing. I know I could have earned slightly more interest by waiting until the end of the month to transfer the money out of savings, but since I don't expect to touch this money for several years unless I'm faced with a dire emergency, I went ahead and ordered another $2,000 worth of I Bonds today.

Somehow doing all this makes me feel very grown-up, which I suppose I sort of am now. Many kids in my small town went out and bought cigarettes on their eighteenth birthdays, even the non-smokers, just to revel in their newfound privilege. I cashed out my custodial savings account and got a checking account and a certificate of deposit in my own name instead. (I was very disappointed that everyone who could drive me to the county office was busy and I had to wait until a few days later to register to vote as well.) In my mind it was always a given that becoming an adult meant planning for the future and managing money to the best of your ability. (Thanks, Mom and Dad.)

4 comments:

Anonymous said...

HI! I just came across your blog while searching for Ramen recipes! (I heard there was a book on 101 ramen recipes, but I digress...) Anyway, regarding your short term health insurance question: I work for a company that processes insurance applications, and I am getting pretty familiar with the good and bad policies. I had a suggestion for someone in your situation. Since you will be covered soon with your job and basically only need the plan in the event of an accident, there is a plan called the Allied temporary Health Insurance plan, and the reason I thought it would be ideal for you is because it has really high deductibles,(5,000), and a zero deductible accident benefit. This means that if you have an accident, it will cover you without you having to meet your deductible. I am not an insurance agent and I have nothing to gain by recommending this to you, so please do not think I am trying to sell you insurance, but if you want to check it out, the website is www.isaBrokers.com and you can just check it out and draw your own conclusions on your own time. I think it would be just what you're looking for without buying a bunch of stuff your don't need. Good luck to you!

Jim ~ mydebtblog.com said...

I would avoid COBRA coverage like the plague. You'll end up getting some high deductible health insurance but remember it's not there for when you catch a cold, it's to cover yourself for the unforeseen event you'll really need it.

Instead of bonds why don't you put money into something with better return? The bond market just doesn't seem to have very good return in general, it is a safe investment if you would even call it that. How about retirement savings? Do you have a Roth IRA or 403b?

I grew up in a small farm town and know what you mean with being able to buy smokes. Wasn't for me personally but I did celebrate my 21st and had the day after off from work, which was great. We all have to grow up at some point and figure out this money thing sooner or later. Obviously the sooner the better because it determines how wealthy you will become later in life.

A said...

If you know what school district you'll be working for, you can find out there policies.

In fact if the delta state is anything like SC, you've got options for the state plan and the beautiful thing about being a state employee is you get everything in SC from day one. Fully vested in retirement, insurance, and personal days.

Since I knew this was happening, I rolled the dice and laid low from the time I graduated until the day my insurance kicked in.

Cobra would have killed me since my dad's insurance was rather expensive for dependents.

E.C. said...

Jim,
I'm looking at the I Bond as a place to store money I'd normally keep in a cd, and the rates are good when looked at in that light, especially if you expect inflation rates to increase. In a year, I'll be able to cash out the bond if necessary and thus it can become part of my emergency fund.

I'm going to fully fund a Roth IRA for 2008 in May when a cd matures. I plan to start contributing 10% to a 403b when I begin work and then adjust that once I get a better sense of my monthly expenses and whether funding the 403b at that level will allow me to put aside enough to fully fund a Roth for the next two years as well.

I'm looking at a plan with a $2,500 deductible so it's definitely for major emergencies like appendicitis or a broken leg. Other than routine annual checkups, I've only had to go to a doctor once in the past four years so I'm pretty certain I can handle the costs of any minor illnesses.

A,
They may not tell me where I'll be placed until July so I don't know if I can count on a system that's as nice as South Carolina's. My parents are very insistent that I get health insurance, and if I try to avoid buying it, they'd probably pay. It looks like buying short-term coverage myself is the best option. I'm not keen on giving up the battle for financial independence in exchange for a $57 per month insurance plan I can fairly easily afford.