In your 20s, life insurance may not be at the forefront of your mind. In fact, it may seem like a daunting concept to think about when you’re completing your studies or just settling into your career in Singapore. As such, you may feel that life insurance isn’t necessary at such an early stage. But the truth is, no matter your age or your current financial situation, setting up a life insurance and protection plan can play a part in securing your financial future and avoiding any potential pitfalls that may arise down the line.
To delve into this further, we’ll debunk four common myths about life insurance in your 20s.
Myth #1 – “I’m too young to need life insurance”
Life insurance is commonly presumed to be for the elderly or for people at risk of medical conditions. However, it is important to know that unexpected accidents and illnesses can happen to anyone, regardless of age. Without the right preparation, the costs of an accident or diagnosis of a critical illness could become unmanageable for loved ones.
Being young and healthy can actually make it easier and more affordable to purchase a life insurance policy. As you age, the premiums for life insurance may become more expensive. If you’re in good health and have a relatively low-risk lifestyle, you may qualify for much lower premium rates than someone older with more medical issues or high-risk habits.
Additionally, pre-existing conditions may make it more tricky to obtain coverage when you need it most. Getting a life insurance policy while you’re young would thus mean you won’t have to worry about the medical expenses for pre-existing conditions later on if something were to happen to you.
Myth #2 – “Life insurance is too expensive for young people”
While cost is certainly something to consider when shopping for life insurance, there are many different types of policies available at various price points – so chances are there’s one that fits within your budget. Some policies like whole life may require higher premiums. However, there are also more affordable options available such as term life policies.
Term life insurance is a type of life insurance that offers coverage for a specific period, usually ranging from 10 to 30 years, without including any investment or savings features. Term life insurance exists solely to provide a death benefit to your beneficiaries if something unforeseen occurs during the term.
Plus, as mentioned, the earlier you get involved in a plan, the lower the premiums often are and there is no substitute for the peace of mind that comes with knowing that your family will be taken care of.
Myth #3 – “I can rely on my employer’s life insurance coverage”
While many employers offer life insurance coverage as a benefit, it’s still essential to assess your needs and consider if additional protection is necessary. Employer-provided life insurance policies may have limits on the amount of coverage, and the policy may only be in effect while you’re working for that company. If you leave your job, you may lose this coverage altogether.
With this in mind, procuring life insurance policies outside of those supplied by your employer can be beneficial in creating added security for yourself and your family in case of an emergency.
Myth #4 – “I don’t have anyone depending on me financially”
Furthermore, if you don’t have anyone depending on you financially, such as children or a spouse, it might seem counterintuitive to purchase life insurance at this point of time. However, knowing that you have coverage in case of unexpected events can alleviate the stress and worry that comes with the unknown. It can also be an effective way to protect your future insurability. Even without dependents, a life insurance and protection plan can still be an invaluable resource for adults living on their own in Singapore.
For example, if you have student loan or credit card debt, getting a policy with death benefit protection means that those loans would be paid off if something were to happen to you unexpectedly. Additionally, if you develop health conditions that make it difficult or impossible to obtain a life insurance policy later on, purchasing a policy now can ensure that you have coverage in place.
Plan ahead for the future you
By having coverage from your 20s onwards, you’ll have assurance of long-term financial security for you and your loved ones. As you get older and your financial situation changes, you can also adjust your coverage accordingly. To get started, you can reach out to our team at Expat Insurance to find out more about term life insurance in detail.