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Think you’re too young for insurance?
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Get insurance early in life and the benefits will follow you.
You’re a young adult, with your whole life ahead of you. You may be settling into your first career. You might be working in another field while you strive to land your dream job. Perhaps you’ve just moved into your own apartment or jumped into home ownership.
Whatever your situation, you know there’ll be bills to pay: your rent or mortgage, heat, hydro and water bills, monthly costs for phone, internet and streaming services, and don’t forget those car and student loan payments. You’re earning enough to pay taxes now, too, and ideally trying to set aside some savings.
With all the financial responsibilities young adults have to manage, insurance premiums may seem like just another cost that could strain the budget unnecessarily. However, there are benefits to being insured early in life, and some types of insurance are appropriate and necessary for people who are just starting out.
Why get insured now?
Insurance can be considered the “protection” part of your financial plan. It’s there, just in case, to help you or your family cover unexpected costs if something terrible happens. You can use insurance to preserve everything you already have – and insurance you get while you’re young will be ready to protect everything you’ll work hard to get in the future.
Insurance is changing to meet your needs
When you think about insurance, do you imagine a pile of paperwork full of terms that most people find difficult to understand? That’s your parents’ (or grandparents’) insurance, and things have come a long way since their day.
Insurance companies now recognize that everyone – and especially younger generations – likes to get things done quickly, efficiently and digitally. This understanding has led to a big push to make insurance simpler, faster and easier to understand. Many companies have embraced digital technologies, including the very focused and effective use of artificial intelligence (AI).
Application processes have been streamlined, and some products no longer require medical exams and blood tests, as they once did. An online application with an instant decision (and therefore instant coverage) has become the norm for many insurance policies. Technology also means it’s now a much simpler process to submit claims and receive benefits for many types of coverage.
Perhaps most importantly, companies are offering flexible products that meet the needs of younger people, such as term insurance and critical illness insurance.
Term insurance is the simplest type of life insurance
Term insurance pays your beneficiary a tax-free lump sum on your death. You choose the amount of coverage – for example, enough to cover funeral costs or enough to sustain your family’s standard of living for several years. You also choose how long you want to have that coverage and lock in the premium price – often for 10 or 20 years.
One of the best things about getting term insurance set up while you’re young is that you can generally either keep renewing it until you reach a certain age or convert it into more sophisticated permanent life insurance. In either case, you won’t need to go through an underwriting process and risk being denied coverage. Some term insurance policies also allow you to take a cash advance on the policy if you are diagnosed with a terminal illness.
Critical Illness insurance lets you focus on recovery
Critical Illness insurance pays you a tax-free lump sum if you get one of a range of illnesses and conditions covered in the policy. Keep in mind that young people are much more likely to get a critical illness than to die.
The money from either term insurance or critical illness insurance can be used for anything at all. With critical illness insurance, this may include accessing health care treatments not covered by your provincial plan, paying for extra help around the house or with child care, allowing a family member to take time off work to help with your care or simply keeping your household financially afloat.
Content courtesy of Solutions magazine.
Visit manulife.com/infoalumni to learn more about the insurance plans available to you.