Does age really matter?
When should you buy your first insurance plan? Is 18 too young to buy a life policy? Why not wait until you have a family or dependents to protect? What age to buy insurance is a hotly debated topic.
Some feel that you should only buy a life plan only upon reaching a certain age (the age-based approach). Others think you should wait until certain milestones in life, such as marriage, before getting a policy (the events-based approach).
There are pros and cons to each of these two camps of thought. Let’s take a closer look at the merits of each.
As its name suggests, this approach involves committing to a life insurance policy the moment you reach a chosen age.
The advantage here is in preventing you from delaying your insurance protection until it is too late - i.e., the onset of a medical issue or disease that would drive your premiums up, or worse, make you uninsurable.
However, this approach doesn’t factor in future events. For example, let’s say you get married 3 years after buying your initial life insurance policy. As your initial coverage did not account for your spouse, you now have to get another plan to top-up the difference.
This may require you to pay additional service fees and charges, wasting money that could otherwise be used for higher coverage. You may also have to undergo more medical check-ups in order to qualify for the additional coverage.
In this method, the idea is to buy insurance only upon reaching a certain life event, such as marriage, or the birth of a child. Doing so allows you to plan for the insurance coverage you need, including the needs of your spouse and/or child.
However, there is a danger in following this method too closely - what if by the time you get married, you discover you already have diseases such as high blood pressure or is pre-diabetic? This would render you uninsurable, preventing you from getting the protection you need. Even if your condition is mild enough to still get covered, disclosure will drive your insurance premiums up.
Also, without a solid deadline, you may be tempted to keep pushing back the purchase of your policy, which increases the period during which you stay uninsured against a tragedy or accident.
Waiting till you hit a certain age, or until an expected life event, to purchase your first insurance plan may seem like a logical plan. Yet, it is not watertight.
We believe that good insurance is insurance that is available when needed. Therefore, the wise thing to do is to purchase your life insurance plan as soon as you can.
Locking in your life insurance early ensures protection against critical illness that may strike later in life. This means that if you do experience the onset of a serious health condition, such as heart disease or cancer, you will receive the finances you need to treat the disease. And with the monetary toll taken care of, you and your family will be better able to focus on your recovery.
Because your individual risk is low while young, your premiums will also be much lower. In fact, with Singapore Life, customers as young as 18 can get life protection starting at S$9.96 per month. Lower premiums don’t just make insurance more affordable, it also means that during the initial years, you’re enjoying full coverage at lower prices, getting more bang for your buck.
There’s a third reason to start your life insurance as soon as you can. Insurance providers, such as Singapore Life, offer a Guaranteed Insurability Option, which means if you want to increase your coverage in the future, you won't have to fork out extra for an additional medical check up or other fees.
This option allows you to raise your coverage by up to 25% of the sum assured, or S$250,000 (whichever is lower), within 6 months of marriage, the birth of a child, or when you take on a more expensive property.
So, don’t make the mistake of waiting to buy your life policy, obsessing over the right time or age. Instead, arm yourself with an appropriate life policy so you can confidently plan and lead the life you want, with the assurance that should the untoward happen, you will have the resources you need to continue along your desired course. And the sooner you do this, the better.
This native editorial was first published by Singapore Life.
Singapore Life was founded in 2014 and fully licensed by the Monetary Authority of Singapore since June 2017, and is the first local independent direct life insurer since 1970.