When we talk about our finances, savings, or retirement, we can’t ignore but always come across the word – Insurance.
Many of us in our 20s may not actually see it as something to think about, especially when we are still young with no dependents and the possibility of any unforeseen circumstances seem too far ahead.
It’s not that it won’t happen, but simply because we might not have lived enough to see things happen. Or is it?
Insurance may simply be just like a goalkeeper in your life, the last line of defense for you if everything ever fails. Prevention is better than cure right but are insurance necessary at a young age?
What Is Insurance For?
Insurance is the preparation for the unforeseen future. We may live our life each day as per normal, but there may be that one incident or accident that may happen to change our life temporary or permanently.
In cases like this, Insurance may help us shelter through that change with a reduction in our financial burden. Thus, to see it another way, it can also be a form of financial safety net for young adults.
Why Do I Need When I’m Young?
Now that we know the purpose of insurance in our life, we may start asking ourselves then why do I need it when I’m young?
In our 20s, most of us might know that someday we will need to be insured somehow, but not many of us may see the importance of being covered early when we are young.
Here’s Why!
1. You Have Lower Risk
They say, “Time is Money” and Time is on your side!
It is true too when getting insured. When insurance companies assess applicants, they look at the risk involved to insure you.
When you are young with no dependents, fit and healthy, it is likely that you can be covered for anything that you choose for (if you do not have any preexisting conditions too)
In addition, you also get to enjoy lower premiums since you are of lower risk to the insurer to likely rack up high medical expenses.
2. Longer Time Horizon
You can call it “Killing Two Birds with One Stone” or “The Power of Compounding”
Getting covered at a young age has many benefits and one of it is also the time horizon that we have, hmm but what has insurance got to do with compounding?
This is because there is also insurance coverage that gives you cash value as you are covered.
With policies like this, starting early allows your cash value to accumulate and compound quicker at a younger age. These policies may include whole life insurance or Investment Link Policy just to name a few.
3. Accidents Happens
Even if you are the fittest and healthiest, accidents do happen. We can never predict what will happen today as we walk out of our house.
Accidents do happen and it always gives a peace of mind knowing that we are sufficiently insured as we live off our day-to-day activities.
What Are Some Insurance Plans Available?
There are many insurance plans available out there, and anything can be insured today, from loans to assets that you own.
However, the few basic plans that we may consider when we are young may start off with one of these few coverage
Health (Hospital and Surgical)
Term / Life Insurance
Critical illness
Personal Accident
Taking Charge of Our Personal Finances
Now that we’ve looked into the reasons behind starting early and the few types of insurance coverage, is it really necessary to start early?
It pays to start early and in the future you may just come thanking you when things really happen. But of course, all of us have our personal needs and concerns.
Not all of us may be worried about being hospitalized now but maybe some of us may be worried about leaving something behind for our loved ones upon death.
It might simply just start with getting to understand ourselves a little more before we realize the concerns that we might have, and the insurance we should be getting for us.
Chat with us today for a free consultation, for you to understand yourself better, and for us to help you better!
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