Y ou are young, free and single. You have just started your first job and are enjoying some financial independence. So why bother about life insurance?
Here’s why.
“We all know the golden rule of shopping at a sale. Go early. Apply this to insurance buying. Start early. You will enjoy cheaper premiums and acceptance is more likely as your health is generally better,” explains Helen Yeoh, vice- president of marketing at Great Eastern Life Assurance (Malaysia) Bhd.
“For young working adults, insurance needs are typically minimal. Nevertheless, they should set aside disposable cash to buy insurance plans with a savings element,” says Richard Bender, executive vice-president and general manager of American International Assurance Co. Ltd.
“With this type of policy, you can be sure your money is not lost if you do not claim from the insurance benefits. Consider life insurance as a form of disciplined savings for the future,” says Ooi Say Teng, chief executive officer of UniAsia Life Assurance Bhd.
Your circumstances will change as you get older. So what kind of things should you be considering for the future?
“You may need to provide for dependents such as your spouse, children or siblings. Your aged parents may be depending on you for their living expenses. So if anything unfortunate happens to you – such as disability or critical illness
- a good life insurance plan will support you and your parents,” says Ooi.
Insurers agree that savings and protection elements should play equal roles in your choice of policy As a rule of thumb, Yeoh suggests you have insurance cover at least five times your annual salary, or up to 10 times if you can afford it.
“While the expected average life span stretches past retirement age, it does not necessarily imply that retirement needs are more important than insurance needs,” says Bender.
“You should have a balanced portfolio to guard against financial uncertainties. For example, if you don’t have medical coverage and you undergo costly major surgery, you could exhaust your savings and have very little left for your retirement,” he continues
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