Why we need to buy Insurance even we are still single..
Some people asked me why single and kids don’t need any insurance? actually, we could assume that kids or single don’t need any insurance because they don’t have any responsbility to covering someone else.
Some financial advisors do not recommend life insurance for single people without dependents. I agree that life insurance may not be the most relevant financial protection product for a young, single person without dependents. However, I also believe that change is constant. As such, a person who fits the profile in question may need life insurance in the future. Also, insurance is not the type of product that you can purchase whenever you can afford it. Therefore, it might be a prudent to acquire adequate life insurance while you can. The following are the most important reasons why a young, single person should acquire life insurance now:
1) Affordability: When you are younger, the premium rates for life insurance are lower. This reflects the lower risk posed by younger people based on the concept of life expectancy. However, it wouldn’t make sense to purchase it simply because it is cheaper now. Any purchase or investment should have value to the customer. If there is the slightest chance that life insurance may be valuable in the future, purchase it now.
2) Insurability: This refers to the likelihood that an insurer will accept your offer to be insured. Insurers have the choice of accepting your offer as it is, increasing your premiums due to elevated risk or denying your application if you are deemed uninsurable. If you defer purchase of life insurance, there’s a chance that your offer may be rated or denied. To wait until you’re older is to gamble on your insurability.
3) Cash values: With cash-value life insurance plans, you would accumulate far more at an earlier age if you take the life insurance plan earlier. For example, with a Universal Life plan, the savings portfolio would be working for a longer period if you start earlier. You would benefit from compounded interest and be able to have high cash values available at an earlier stage in your life.
4) Forced savings: Quite a few young people are notoriously irresponsible with their finances. Purchasing cash-value life insurance for the young, single person is one way of ensuring that the act of saving takes place at that juncture. Universal Life plans are the best type for forced savings, since they typically have an independent savings plan embedded in them.
5) Business/ mortgage purposes/ estate planning: Life insurance is not only for dependents that you do not have as yet. Life insurance plans are sometimes necessary for business transactions and mortgages. If you plan to be single without dependents for life, you may still need life insurance for purposes such as these. It is never too early to begin estate planning either. Life insurance both creates an estate and protects what you have already. So if you acquire dependents later on, your estate would already be secured for their benefit.
The best type of life insurance for a young, single person to purchase would be a cash-value life insurance plan.
That’s my opinion about that’s fact. Actually it just personal opinion. And it doesn’t mean that we must buy insurance for any younger and kids. We need more attention about another condition.
