Last Updated on by Tree of Wealth
This article was submitted by one of our reader/financial advisor whom is in her 20s and want to share on the importance of financial planning for the younger crowd of those in their 20s.
Why do I need insurance in my 20s?
‘I’m still so young and healthy, I don’t think I should spend on insurances’
‘Aiya, when I kena something then think about insurance. A bit redundant to waste that money now’
‘I already got a hospital plan and that’s enough’
Majority of us (not me), thinks that by being young, highly unlikely we will be the one falling sick/having major illnesses. I’m definitely at the other end of the spectrum. I believe it can happen to anyone and at any age and it is not uncommon to see people in their twenties battling with cancer. So the issue here is not ‘HOW TO PREVENT MYSELF FROM GETTING CRITICAL ILLNESSES?’ though yes, leading a healthier lifestyle, eat clean, exercise; these are factors which can help LOWER one’s risk of getting critical illnesses. However, it is not 100% prevention.
Truth of the matter is, buying insurance cannot prevent you from falling sick but it can prevent your lifestyle from being changed in the event that you fall sick. It’s the same concept as bringing an umbrella out. “IN CASE it rains” So buying insurance is also the same concept as “IN CASE I fall sick” “IN CASE I cannot work, who is going to pay for my expenses?’
Insurance is not expensive and it SHOULDN’T BE EXPENSIVE if you’re young. In this case, in your twenties. If you find that your insurance is expensive, you might have existing policies overlapping with each other. Psst, check with a trusted advisor. There is always something for everyone based on your needs and budget.
With that being said, WHY SHOULD I GET INSURANCE WHEN I’M STILL YOUNG?
1. Lower Premiums
Most of the time, insurers charges the premium amount based on your current age. This is why you are able to get a comprehensive and holistic coverage with a lower premium (aka CHEAPER) at a young age. Be shook! The premium amount based on the same coverage: 20 years old vs 50 years old differs.
2. Pre-Existing Conditions
Majority of the people, as mentioned in the beginning of this post thinks that because I am young, highly likely I am still healthy. YES, this is the reason why we should get insurance while we are still young and healthy because many insurers exclude many (or most) of the pre-existing conditions from getting covered which defeats the purpose of opting for a health insurance policy. What it essentially means is that if party A is diagnosed with breast cancer and party A wishes to purchase a health insurance, insurers will exclude coverage for this pre-existing condition WHICH IS SOMETHING that party A is concerned about. This is why it is important to get yourself covered when you’re still in the pink of health.
3. Waiting Period
Did you know that in most cases, health insurance policies have a waiting period ranging from 30 to 90 days? During which you cannot make any claims even if you have a medical emergency. Meaning to say, if you wait till you feel unwell before deciding to get a health insurance, it’s probably too late.
4. Lower Chances of Rejection
As the saying goes, “青春就有动力，年轻就是本钱”. It is saying that when you are young, you have the capital. When you are young, highly likely you are healthy hence most likely you are able to buy health insurances as compared to someone in their 50s with pre-existing health conditions.
5. Rising Healthcare Costs
Singapore’s ageing population, along with medical advancements and increased operating costs, are the key drivers of rising healthcare costs, said Senior Minister of State Koh Poh Koon yesterday. (Lai,L. 2020)
The last thing we want is to empty our pockets/savings for medical bills. How many people are able to pay thousands of dollars in cash without having to burn off most or all of their savings? And how much do you need to save to be able to have enough for these unexpected hospital bills? For this reason, Insurance coverage helps to relieve the burden of large hospital bills. When one is sick, the last thing you want to worry about is where to get the money to go for proper treatment yet at the same time not having to burden your loved ones.
Health is Wealth,
When you have adequate medical cover to take care of any health emergencies, you can focus on making other long-term investments.
Should you have any inquiries, feel free to get in touch and our partnered Financial Advisory advisors will follow up with you =)