Financial Thoughts
I Am 25 And Single, Why Should I Buy Insurance?
You have been working for a year and you are getting comfortable with how things are working out for you. No plans to settle down yet and both your parents are healthy and still working. No one is depending on you financially and most of the money that you earn from your job is for you only. In other words, you are in a good place.
Then the thought of insurance comes to the picture, but you do not see a need for it. Your demise will not be detrimental towards your family as you are not the sole breadwinner or even only contributing a small amount.
The question will then come in, “Why should I buy insurance?”
You do not understand insurance.
In layman terms, you are paying a certain amount of money in exchange for a certain amount of benefit. The kind of benefit will contribute to how the premiums are priced.
The death benefit is one of the common benefits amongst insurance plans. But that is not the only one either. Some insurance plans do cover disability, critical illness or even early critical illness.
So not necessarily that insurance benefits are for your beneficiaries only. There are benefits that will be paid out if you are not able to work anymore, or contracted a certain major illness.
Therefore, it does benefit you if you buy insurance. It gives you financial assistance when you are not able to earn an income. Indirectly, with insurance, it does help your family as well. If you can support yourself even when you cannot work, you are helping your family by not putting extra responsibility on them.
You are young, therefore premiums are cheaper.
Some insurance premiums are priced at the age of when you buy it. The younger you are, the cheaper the premiums.
For example, the annual premiums for a 25-year-old man compared to a 40-year-old man for a whole life insurance with $100,000 death coverage will be $1,422 and $1,889 respectively.
Therefore age does matter in terms of insurance. Why should we spend more money on the same thing? It does not make sense. We sometimes go to a certain extent in order to get a cheaper price for an item, why cannot we do the same for insurance?
Insurance does not need you, you need insurance
Some insurance policies will require you to be fit and healthy in order for you to get insurance. In an event where you have an illness, severely overweight or disabled, you are not able to get insurance. In other words, you are uninsurable.
If you are able to run a marathon or even take your IPPT, you are considered healthy. Well since you are young and still healthy, why delay that opportunity? There are a lot of people who would do anything to get insurance. But due to their situation, they are not able to do so.
We take things lightly when we are healthy but if you are the complete opposite; everything will seem like falling apart. We can take a fall when we are young but the cut will be deeper and more hurtful if we experience a fall when we are much older.
You are 25 now but not in 20 years time
Eventually, when you grow older, you will have more responsibilities. And with more responsibilities, you will have more people being reliant on you. And if you are no longer around, things will slowly fall apart and people might suffer.
We cannot foresee the future, but we can be prepared for it. Enjoy your youth now but keep in mind of the challenges tomorrow.
Hope that this article was useful. Do share it with your family and friends. Till next time.
Disclaimer:
I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.
