Money myths busted: I’m too young to need life insurance
Young people often believe that life insurance is an expense that they can put off until later in life. We outline the benefits of taking out life insurance while you are still young.
What is life insurance?
Life insurance is a financial planning tool that protects your loved ones against the financial implications of your death.
When you take out life insurance you enter into a contract with an insurer. In return for regular premium payments, the insurance company will pay a financial benefit to your nominated beneficiary or beneficiaries upon your death. They can use this as they wish.
There are many different options when considering life insurance: from whole-of-life policies with an investment element, to term policies designed to cover a specific risk for a specific period as well as ongoing policies that are renewable annually.
I’m too young to need life insurance
If you are young, life insurance may not be at the forefront of your mind. Death probably seems distant, and this is one expense that you may think you can put off until later, especially if you don’t yet have any dependents.
Nevertheless, there are a number of benefits to taking out life insurance at a young age. Here are some compelling reasons to consider life insurance, even if you are still young and fancy-free!
6 reasons to take out life insurance while you are still young
- Affordable premiums
One of the most significant advantages of purchasing life insurance at a young age is the affordability of premiums. Life insurance premiums are typically based on age and health, meaning that younger individuals generally have lower rates. By securing a policy early, you can lock in a lower premium for the long term.
- Future insurability
Life is unpredictable, and it’s impossible to know what health issues you might face in the future. By obtaining life insurance while you’re young and healthy, you ensure that you have coverage in place, regardless of any future health conditions that may arise. Once you have a policy, it can be more challenging and expensive to get coverage if you develop health problems down the line.
- Investment potential
Certain types of life insurance, such as whole life or universal life, offer a cash value component. Over time, this cash value accumulates and can be used for various purposes, such as supplementing retirement income, funding education, or even taking out a loan. It provides a financial safety net and an opportunity for long-term growth and can be a useful addition to a diversified portfolio of assets.
- Financial protection for loved ones
You’re young but you aren’t invincible. If you die, someone is going to have to pick up the tab for your funeral expenses and outstanding debts. If you don’t have a partner, that could fall to your parents or siblings. Life insurance is a way to ensure that you don’t leave a legacy of unpaid bills for your loved ones to pick up. You’ll find more information on life insurance as an estate planning tool here.
- Supplementing employer-provided coverage
Many expats have life insurance included as part of their benefits package however it can be limited and not sufficient to meet needs. In addition, it probably won’t follow you if you change jobs. Taking out your own life insurance policy gives you control and flexibility and ensures that the cover you have is tailored to you.
- Peace of mind
As with all types of insurance, life insurance brings peace of mind. In a world plagued by uncertainty, knowing that you have done everything you can to protect your loved financially when you are gone is priceless.
Life insurance for expats in Asia
If you’d like to discuss your life insurance needs with a professional financial adviser, get in touch. We have been arranging life insurance for expats in Asia for nearly 20 years and can ensure you have cover tailored to your needs.
A leading provider of expat financial services and wealth management services across Asia.
