When you are young and just starting out, buying life insurance is probably far from your mind. You are more likely to be researching where to go this weekend than insurance policies that provide the best protection.
One possible reason is that Millennials (defined as those between the ages of 18 and 34) who have not been in the workforce for very long tend to have less disposable income, so there is not a lot of spare cash to spend on intangible things like insurance. You might also be saving money for big-ticket items like buying a home or major life events like marriage.
But those are not good reasons to put off buying life insurance. Just the opposite, those are the precise reasons why you need it as you are starting to accumulate assets and now have something to protect. Here are four other reasons why you should get yourself covered.
1. It is Cheaper When You are Younger1
When it comes to buying insurance, being young does have its privileges. For one thing, you are considered low risk so you will be able to buy a comprehensive policy at a much cheaper rate, especially if you have no pre-existing illnesses. Shop around for a policy that provides the coverage you need at a rate you can afford. The longer you put this off, the higher your premiums will be and you might even have trouble securing any insurance in the future if you develop any health issues.
2. Build Up Your Savings at the Same Time2
Kill two birds with one stone with a policy that grows your wealth and provides you with protection. Insurance companies generally offer two types of such plans: endowment and investment-linked policies (ILP). Endowments work particularly well if you want access to your money during a certain period, for example, in 15 years time when you want to pay for your child’s education. Speak to a qualified financial adviser to assess your risk appetite and decide which type is best for you. Find out more about how to make your savings work harder for you here.
3. Protect Your Dependents3
Even if you do not have children at this stage, it does not mean that you do not have dependents. Perhaps your parents and siblings depend on you to contribute to the monthly household expenses? Having insurance gives you peace of mind that should anything happen to you, your loved ones will still be taken care of. In the event that you have debt, they will also be able to pay it off and not be saddled with a financial burden.
4. Employer Life Insurance is Insufficient3
While it is great to have group insurance coverage provided by your employer, it is likely to be very basic protection. You may need to pay more out of pocket in the event of an emergency, which can be inconvenient, especially if you are trying to save money. The policy is also tied to your employer so if you leave the company and are in between jobs, you will not be protected during that period. Having a personal insurance policy tailored to your needs will ensure that you are adequately covered at all times.