What is an Insurance Policy?
An insurance policy or insurance plan is a contract between an individual, the insured and an insurance company, the insurer. The insured is to pay pre-decided monthly amounts that work as premiums to the insurance company, in exchange for a sum assured to be given if an unfortunate event arises towards the insured, such as death, damage to property or Total Permanent Disability (TPD), depending on the type of insurance applied for. In addition to the insurance, there will be several benefits or features that can be added to the insurance plans chosen.
What are the Plus Points of Buying Insurance for Young Adults?
Individuals are most often suggested to buy and invest in insurance in their 20s, usually as soon as they begin entering the working world. There are several different types of insurance that young adults can look through, such as life insurance, medical insurance, family insurance, car insurance, travel insurance and many others. However, the main question would be when to buy your insurance. It would be highly recommended to buy insurance policy for young adults Malaysia when the individual is in their 20s due to several benefits and plus points. The first benefit of buying insurance in your 20s is that the individual will be paying a lower amount and percentage of premiums as compared to buying the insurance when the individual is older. Secondly, the earlier you buy life insurance, the longer the death benefit coverage period is. Third, the accumulated cash value of the investment-linked insurance plan can be used while you are alive. Lastly, the individuals may have the option to increase certain coverage terms at a later date without the need to carry out a new medical examination.
Why Get Long-Term Insurance in Your 20s?
Getting life insurance before you get married can save you money in the long run, if you are planning to start a family later on. When you buy insurance when you are younger and healthier, the monthly premiums to be paid are lower as compared to buying insurance when you are older or have developed any medical conditions. If the individual has any other obligations or large debts that are not related to family matters, the individual should consider getting the insurance suitable.
Should I Buy a Term Life Insurance or Whole-Life Insurance in My 20s?
Getting insurance in your 20s requires you to pay a lower rate of premiums. Hence, it would make sense and be more beneficial to buy a permanent life insurance policy instead of a term policy. This is because life insurance will last you till your death, regardless of your age. You can choose the premium payment terms and have it cover you and your family after death.
To summarise, the main benefits of getting life insurance in your 20s as a young adult are that you can pay lower amounts of monthly premiums, get longer death benefit coverage, ability to use the cash value of investment-linked insurance when alive and increase coverage term if necessary without carrying out an additional medical examination.