THE Young Single Adult
You have just finished world is your oyster. milestone typically your financial dependence on your parents. Independence also comes with new challenges. Being young and healthy does not mean that you should be unprepared for life's not-so-pleasant surprises.
Young single adults also need significant insurance cover. Even more so if you are into dangerous sports like mountain climbing. Many do not realise that their parents' health insurance no longer cover them once they complete their studies.
If you are already working and earning a regular income, then you would want to protect your greatest asset: yourself. You also want to make sure that your parents are taken care of if the unfortunate should happen to you.
A whole life policy would provide young single adults with life time protection, for as long as the policy remains in force. Although the risk of critical illness is low at this age, do consider taking up critical illness rider coverage as well. Besides life insurance, young single adults should not overlook the importance of having sufficient health and disability insurance.
The idea is to insure yourself against risks that may hurt you financially.
Checklist for the Young Single Adult
* Whole life insurance coverage to give you lifetime protection against death and disability. It is cheaper when you are young and healthy as premiums increase with age.
* Disability insurance to protect against loss of earnings in the event that you're physically unable to work.
* Critical illness cover to help pay for your treatment costs.
* Health insurance to take care of medical costs.
* Constant review of your insurance needs, especially when significant events, like marriage, take place.
The Young Family
Getting married and starting a family are major life events. It also means having increased financial commitments, such as mortgage repayments and bringing up young children. If both spouses are working and contributing to household expenses, consider the financial impact should something untoward happen to one of you.
The young family should seriously consider increasing their whole life insurance coverage. Young parents also need to plan for their child's education and their own retirement. Consider endowment plans as they have a high savings element which would give a higher maturity value.
The insurance objective for a young couple is to ensure that their family do not suffer financially if something happens to either one of them.
Checklist for the Young Family
* Increase whole life insurance coverage to protect spouse and children.
* Take up endowment plans to save for children's future education and for your own retirement.
* Mortgage-reducing term assurance to pay off the mortgage loan in the event of a tragedy.
* Sign up for a term life plan, which is for a fixed period, to help ease your financial commitments to your family in the event of death or total permanent disablement.
* Increase disability and health insurance to cover the risks of earnings loss and expensive medical costs for you and your family.
The Older Couple
As they approach retirement, the older couple would need to start preparing for life during their golden years. At this stage, the focus would be more on estate planning and guarding against poor health and disability. You would want to nominate the beneficiaries for your whole life endownment policy as part of your estate plan. You can specify how much you want to leave behind for your loved ones should anything happen to you.
With escalating health care costs, it is essential that you have adequate health and disability protection. Be mindful that health, critical illness and disability insurance become more expensive with age. Consider also long-term care coverage for extended medical and nursing care.
How much coverage is enough? The rule of thumb is enough to meet your spouse's lifetime needs.
Checklist for the Older Couple
* Estate planning
* Increase health, critical illness and disability insurance to cover the increased risks of failing health. Older persons are generally more prone to accidents and mishaps that are more serious, and take longer to recover their health.
* Long-term-care coverage to protect your spouse from financial hardship resulting from costly medical and nursing care expenses.
In your journey through life, you are never too young or too old to start on a plan to ensure financial security and protection for your loved ones. Having the right type of insurance for you and your family is one way of achieving this, that will provide protection against risks at various life stages.
Keep in mind that as your financial needs and priorities change over time, so do your insurance requirements. Review your insurance policies often to have better peace of mind.