When the weather is nice and bright, you may not think much of an umbrella, but when it starts pouring, your umbrella becomes your only means of protection. Many of us do the same thing with insurance; we buy it only when something bad happens and when it’s too late. Having insurance in place before an accident gives you the peace of mind knowing that you’re covered in the event of an unfortunate circumstances.
Many of us have been stuck in a situation where we had no other option but to rely on our parents for financial assistance. It could be due to loss of job, illnesses or any other personal reasons. In such scenarios, it is always better to be prepared with insurance plans that help you tide over the difficult times.
If you are in your 20s, there are four types of insurance plans that you must never delay to have in your financial plans, to prepare you for that rainy day.
Do you even need them?
If you are in your mid-20s, you have just started your career or are about to. While it’s tempting to spend most of this time enjoying life and having fun, it would be wise to learn about different types of insurance plans now. Here are four types of insurance policies that you should start investing in now.
Health Insurance
Medical bills can run up to thousands of dollars. Whether it’s an accident or a fever, medical treatment can cost a lot of money. And if you are already paying off student loans, the last thing that you want is to be burdened by additional medical debt. A health insurance plan will help you pay for any medical costs and protect your savings account when an illness strikes.
Most people don’t think about health insurance until they need it. But the problem is that when you need it, it’s too late to get it. Most medical conditions take a while to develop, and insurance companies can tell from your medical history whether you have one. If you wait until you’re sick to buy medical insurance, you might not be eligible already to get coverage.
That’s why it’s important for everyone to buy a health insurance policy as soon as they are able to work. That way you’ll already have a policy in place when you need it.
Term Insurance
Term life insurance is designed to provide financial protection for a specific period of time, such as 10 or 20 years. With traditional term insurance, the premium payment amount stays level for the coverage period you select. After that period expires, policies may offer continued coverage, usually at a substantially higher premium payment rate. Term life insurance is generally less expensive than permanent life insurance.
The main purpose of term insurance is to provide protection for your family should you pass away or suffer from a critical illness during the period of your policy. If you die or are diagnosed with TPD or critical illness before the end of your policy term, a lump sum will be paid out to your beneficiaries. The sum assured can be used to cover funeral expenses, mortgage or debt repayments or any other living expenses that your family may face. It may also help them to maintain their current standard of living.
Life is unpredictable. Anything could happen to you and your loved ones at any moment. In the event of death, your family will be devastated by the loss of their main provider. They may also be burdened with financial obligations that you have left behind. Without sufficient protection, they may not be able to meet these obligations, and as a result, their quality of life may suffer. To protect them from such a fate, make sure that they are properly insured against these eventualities by purchasing a term life insurance plan.
Savings Plan
Most of us have a vision of what we want our future to look like. Whether it’s being debt-free, living in a house that’s paid off, funding your children’s education or retiring with a solid nest egg, most of us know what we want. The problem is that we don’t always know how to translate that vision into action. We may not know where to start, or how to get there.
It sounds simple and yet, it is surprising how many people don’t have any savings plan for the future. And surprisingly, even those who do have some savings don’t have an adequate savings plan.
A savings plan is like a compass that guides you through your financial journey and keeps you on track to reach your goals. It also helps you to overcome any unexpected setbacks and emergencies along the way.
Retirement Plan
If you want to retire early, there is one obvious problem: how will you live? If you’re used to earning $100k a year, it’s not easy to get by on $40k, which might be all you can withdraw from a $1 million portfolio if you need the money to last.
It’s important that you determine how much you need for retirement. It may be easier for you if you use a calculator. You will find out what your retirement is going to look like, how much money you might have in retirement and how much extra money you need to save each month to get there.
Saving for retirement must be done earlier than late and suffer with regrets. That’s especially true if you don’t have any insurance or solid retirement plan at work. Luckily, it’s easy—and affordable—to start your own retirement plan with a retirement income.
When it comes to saving for your golden years, having a well-thought-out retirement strategy is essential. After you stop working full-time, your retirement savings will be your primary source of monthly income during your golden years.
Start Getting Insurance Now!
It’s never too early to get these 4 types of insurance. No matter what your age, it’s better to be prepared than not. There are a lot of factors to consider, but the bottom line is that these insurances are something that people should not put off especially on your 20’s.