5 reasons why millennials need insurance now

Published in June 2020

Article Summary

Insurance is not just for the elderly. If you are a millennial, it pays to start planning for your insurance today.

5 Reasons Why Millennials Need Insurance Now

Your twenties are a time for exploration and carefree adventure. They are also a time of increasing responsibilities — both towards your own future, and that of your family. So while your millennial friends may tell you to “live in the moment!” it helps to plan ahead and insure yourself against life’s uncertainties. Here are five reasons why:

1. Rising healthcare costs

As a millennial, you may think you still have lots of time to plan and save for future medical and healthcare needs. Yet, the reality is that healthcare costs are on the rise. In Singapore for instance, an April 2017 article in The Straits Times stated that according to Mack Eng, Head of Medical at Prudential Singapore, private healthcare costs are rising at 18 percent per annum. One way to cope with increasing healthcare costs is to ensure you have insurance so that you are better prepared to handle expensive medical bills should you or your loved ones be struck with an illness or accident that requires hospitalisation or medical treatment.

2. Cheaper and more coverage

It’s true that the younger and healthier you are, the cheaper your insurance, as it’s about coverage for the long term. Applying for insurance after developing some health conditions may result in you being denied coverage. Moreover, many policies also have a last entry age, after which you may not be able to qualify for coverage.

3. Financial instability in the face of automation

Automation promises economic growth but it also poses a very real threat to many of today’s jobs. A 2016 The Straits Times article noted that the biggest threats to employment today are automation and robots that are increasingly able to handle intricate tasks such as diagnosing illnesses and translating texts.

Bearing this in mind, it’s always best to be financially secure and prepared for the worst. What if your company replaces your entire department with an automated solution? Will you have enough savings to support your family until you find a new job? The good news is there are savings and investment solutions that cater specifically to your saving goals.

It’s always best to be financially secure and prepared for the worst. What if your company replaces your entire department with an automated solution?

4. An early start to retirement savings

Sure, since you are still in your twenties or early thirties, you probably feel that retirement is somewhere in the distant future. Yet, you will have to start planning for it eventually, so why not start today? Whether you prefer an active and adventurous life when you are older, or a quiet one playing with your grandchildren, making sure that you can stay financially independent once you retire will give you greater peace of mind. Saving for your golden years also makes more sense when you are younger and less burdened with financial responsibilities like your children’s education or your mortgage.

The earlier you start planning, the better prepared you will be for the unpredictability of life.

5. Saving up for that home or holiday

New homes and dream vacations don’t come cheap — they usually require us to spend a decent chunk of hard-earned money. Whether you are looking forward to your next fun-filled vacation, or just want to settle into your new home with a fantastic view, it’s important to get into the habit of saving money. One way of doing this is by setting achievable savings and/or investment targets at the beginning of each year. Once you have met your targets for the year, you can use the remainder of your savings for your annual holiday without feeling guilty. Alternatively, allocate your entire year-end bonus as your savings for the year. Your future self will thank you for thinking ahead.

Now that you are in your twenties and working, spend some time understanding your insurance needs. Then speak to an insurance provider with solutions in life and health insurance; they can advise you on savings plans and how to prioritise and plan ahead.

This article is brought to you by UOB in partnership with Prudential. It was first published on Prudential Singapore’s blog Life Matters.

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