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When should Young Adults Start Insuring Themselves?

 “What? Insurance? I’m not interested!!!”… OR

“I’m still young, don’t think I need any insurance coverage!!!”… OR

“I’m just graduated and get into this first job, I don’t have much money for insurance!!!”… OR some even with

“I don’t believe in insurance!!!”… etc.

Do they sound familiar? They are very common responses from people especially youngsters when they are asked to plan for their insurance coverage. They do not feel that planning for insurance is important at their “young” age because they are still young. So, when is the best timing to start planning for insurance coverage as a youngster?

Before joining this industry, I never think of getting an insurance products for myself, especially those with protection elements because of those common reasons which everyone can think of. I’m still young, what should I? I don’t even have enough to feed myself, how can I? All kinds of reasons appeared in my mind too, just like you.

However, when I first joined as a financial consultant, I slowly changed my mind from NO to YES. From a “100% NO to Insurance”; to “Savings Products seem better than keeping all my monies at a bank”; to “Savings with some Protection elements at the same time is better”; to “100% Protection first then followed by other products” currently. What are the reasons that changed my mind along these years?

Do allow me to relate such planning to the major life stages with some “valid reasons” which make us to procrastinate our FIRST insurance planning:

Life stages:

  1. Start working – lower starting pay, enjoy first, buy “wants”…
  2. Dating – common expenses like meals, movie, holiday…
  3. Applying BTO – down payment, stamp duty, renovation, furniture…
  4. Before marriage – planning for a grand wedding bouquet…
  5. After marriage – honeymoon period, travel more, house expenses…
  6. Conceiving – expenses on check-ups before delivery & hospitals…
  7. Become a parent – more expenses on kids like medical & planning for their education…
  8. Middle age – kids pursuing tertiary education, aged parents, own health status, start worrying about retirement due to high inflation and shorter time to save…
  9. Retirement – exceed the maximum entry age for most of the insurance products, super high premium and may be excluded for some conditions due to existing health status if still eligible for certain products…
  10. Before pass away – ill health, more check-ups, higher medical expenses…
  11. After pass away – estate duty or creditor if any, high bills for next generation to repay…

The list seems long, thus do allow me once again to summarise the long list to a shorter form:

When to save?

  • Age 25:
    • We are young and just starting out
    • We don’t make much money yet
  • Age 35:
    • Our mortgage and family bill take all of our pay checks
    • We can’t afford to save anything
  • Age 45:
    • We can’t save now as kids are in college
  • Age 55:
    • It’s not easy to start at our age
  • Age 65:
    • We should have started long time ago but it’s too late now

Even with so many reasons to say a NO to insurance planning, yet it is a MUST to say YES to your first insurance planning when you are still young, why???

Reasons?

  1. Start younger to enjoy lower premium
  2. Start earlier when you are healthy
  3. Start faster to have more years to save means lower monthly burden and longer time to accumulate wealth
  4. Start before marriage so that to reduce commitment when you have a family
  5. Protect yourself before saving so much
  6. Imagine when you are ill, how do your loved one feel? Especially when your family background is not wealthy and they have to bear tons of your medical expenses

Apart from the above-mentioned reasons, there is a very common phenomenon like increased numbers of retiree who self-extending their retirement age due to shortage of savings in either their CPF accounts or own retirement savings. Even Singapore government has implemented a very good “forced-savings” scheme, but due to withdrawal of CPF-OA for purchase of HDB, at the same time reducing the balance in CPF and concurrently reducing the balances in CPF account. Not only down payment for HDB, some even using their CPF-OA to repay the monthly housing loan. It means the accumulation is getting lesser and lesser, or even nearly to zero if the loan amount is big enough.

In a nutshell, it’s either you choose to enjoy now but work later or work harder now to enjoy your life during retirement age. Time waits for no man, quickly contact us for your FIRST insurance planning NOW!!!

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