I'm young & healthy. Why do I need life insurance?
I'm young & healthy. Why do I need life insurance?
When you’re just starting out, life insurance may not be your first concern. Putting it off may cost you.
You may have accumulated some debt along the way. It could be a car loan, HECS debt, credit card debt or you may even have a mortgage. Selected insurance policies can help you maintain your independence if you suffer one of the insured events under those optional covers. You will be able to avoid turning to GoFundMe begging for money, turning to family and friends for money, taking out a loan, selling your home or other assets to continue paying your bills.
Life Insurance is about planning ahead so you and your loved ones aren’t financially disadvantaged if the unexpected happens. Even if you have no dependents, you may still have debts that will need to be paid off or an income to replace if you die or are unable to work through illness or injury.
Your debts don’t go away if you get seriously ill, become disabled or pass away
When you’re young, debts can accumulate surprisingly fast. You may have credit car debt, car payments, a mortgage or any number of other financial obligations to meet. As long as you’re keeping up with the payments, it’s all good. But what if something happens to you that prevents you from earning the income needed to pay those debts? And if you have any dependents, what will the impact be on their financial future if you should die, become disabled or seriously ill?
To determine how much Life Insurance is enough for you, ask yourself how much money you need to cover your debts, fund future goals, replace an income and pay for things like medical costs, home modifications, unpaid leave and immediate living expenses. These questions apply to most young Aussies, regardless of their circumstances or lifestyle
Getting Life Insurance when you’re young can make it cheaper
Most of us are at our healthiest and most robust in the early stages of adulthood. When it comes to Life Insurance, this is an advantage because the price of premiums is tied to your present state of health.
That means a Life Insurance policy taken out when you’re young can often be more affordable than it might be for older policy-holders with pre-existing medical conditions.
Recently we have seen clients who have been declined or received loadings for the following reasons:
Body Mass Index (BMI) - being too short for your weight is a concern for insurance providers. So locking in your insurance protection when you are young, fit & healthy, prior to getting your dad bod or having children, may result in significant savings.
We recently had a client that received a 100% loading due to their weight.
Sleep Apnoea - is a serious sleep disorder in which breathing repeatedly stops and starts. If you snore loudly and feel tired even after a fill night’s sleep, you might have sleep apnoea. We find that many of our male clients, get married, and their wives get sick of their snoring and send them off to the doctors to be tested. The client is diagnosed with sleep apnoea and prescribed an uncomfortable CPAP machine (CPAP - Continuous positive airway pressure therapy) that supports their breathing. However, we have found many of our clients don’t use these important machines to help them breath. Insurance companies do not like when clients are diagnosed with a breathing disorder and do not follow the treatment prescribed. We have had instances where clients have been declined insurance cover. Whilst you are young, fit & healthy, and before you become overweight, married and take a sleep apnoea test, lock in your insurance cover to protect you and your loved ones.
We recently had a client declined for not using their CPAP machine.
Cancer - we have had a client that had cancer 7 years ago at the age of 25. There cancer has been in remission for 6 years. They continue to get check ups to ensure the markers remain at zero. However, insurance companies do not like people that have had cancer in the past. They have been declined for insurance cover from several companies several times, with no answer or clarity on how long they have to be cancer free before they can apply again to be reassessed.
We recently had a client declined for being 6 years cancer free.
Back/Neck issues - We are seeing a rise in back and neck issues from clients, whether that is a result of looking at phones/computers, those that move in to a trade and are on the tools, or even looking down at their new born babies. Depending on the severity of the issue, some of our clients have received loadings and even exclusions.
We recently had a client that had exclusions applied to their neck & back due to issues they picked up from working on the tools.
As you can see there are a plethora of issues that can affect your insurance premiums and coverage. The younger, fitter, healthier you are, the lower your insurance premiums and the greater your insurance coverage.
Young singles
Young, single Aussies should look at their income, debts, assets and monthly living expenses and then imagine what their financial situation might be like if they suddenly couldn’t work due to illness, injury or disablement. If you’re single and have a dependent, you’ll want to consider how they would financially cope in these situations too.
Young couples
If you fall into the DINK category (Double Income, No Kids), you’re probably pretty busy establishing your financial base for the future. That future is bound to include new financial responsibilities: marriage, children, the purchase of your first home and more. As a couple, you rely on each other both emotionally and financially, so being prepared for the unexpected makes sense.
Young families
The most recent studies show that the cost of raising a child in Australia has risen twice as fast as average incomes over the past eight years. With a partner and children in the picture, there’s much more at stake when it comes to ensuring your loved ones are financially protected if something bad happens.
Don’t just think about today, spend a minute to think about tomorrow
Get Protected, Get Active, Get Rewarded
However, with the right structure, you can ensure you protect your family without significantly affecting your personal cashflow.
What’s more, our client’s can save up to 20% on their life insurance premiums simply by making healthier choices.
Furthermore, insurance companies are now offering health & wellbeing programs, which is designed to encourage you to make small changes to your lifestyle to slowly improve your health over time.
In a similar sense to how your car insurance works – when you make no claims – you are rewarded with more competitive premiums on your car insurance.
Insurance companies want you to be healthier so you continue to pay your insurance premiums whilst reducing the risk of you making a claim on your policy.
This program does not only offer premium discounts, for those that continue to make healthier choices & stay active, they are rewarded.
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