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Are you too young to buy life insurance?

Graham Hill
Executive Manager Life Distribution

18 July 2019

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If you’re young and taking your first steps at ‘adulting’, (whether that’s studying, starting a career, a family or a business, or buying a house), you’re likely to be making financial decisions for yourself now and for your needs in the future. 

And you may be wondering whether you need life insurance, or whether you’re still ‘too young’?

Many people ask what the right age is to buy life insurance, but unfortunately there’s no right answer – it depends a lot on your own circumstances, health, budget and plans.

But if you’re in your teens, twenties or early thirties, here are a 5 things to think about before you talk to an insurance provider or adviser.

1. Did your parents put any cover in place for you?

Before you do anything else, check whether you have already got cover you may not be aware of. 

If your parents have life insurance, they may have added you to their policy when you were born to provide a small amount of cover if anything happens to you, and most insurers who offer ‘kids cover’ benefits will give the option of allowing you to take over that cover when you’re between 18 and 21.

Depending on the cost, amount of cover, your needs and your health, it may be worthwhile for you to take over ownership of that cover when you reach adulthood, because you will have been underwritten for it at birth or a very young age which means you’ll have cover for any conditions you may have experienced throughout childhood that could otherwise be considered pre-existing. 

2. Does your employer provide any cover?

There’s another way you might already have cover, and that is through your employer - some businesses offer free life insurance under employee insurance schemes.

 If you didn’t pay much attention to the fine print when you signed your contract, double check what benefits you have and whether your package includes any employee insurance. Even if you do decide you need more, it’s better not to duplicate your cover if possible because it means you’d be paying for cover that you don’t need and can’t use.

3. What are your current needs, and future plans?

When you’re thinking about life insurance, it’s usually better to think less about age and more about what your needs are and what will happen to you, and to any debts or dependents you have, if something happens to you. 

If you have children or are planning a family, or if you’re taking on debt (through buying a house or starting a business for example), life cover or other personal insurances may be something you want to consider. Check out our blog on 7 times in life that it’s a good idea to check your insurance

4. What is your state of health?

One of the reasons people want to take out personal insurance early is to ensure they are covered before they develop any serious medical issues, and because a clean bill of health usually means cheaper premiums.

It’s impossible to predict the future, but if you have had health problems while you’re young or you’re aware of a risky family history for certain medical conditions, you may be better off taking out things like life insurance, trauma or income protection cover before anything comes up. 

You should still be basing your decisions on your need and budget though, so if you have medical concerns it’s a good idea to talk to a financial adviser about your options and what might suit your situation. For more information, check out our blog about options for pre-existing conditions

If you take out cover young enough you may also benefit from being able to lock in a cheaper level premium to fix the cost for the long term. 

5. How ‘risky’ is your job?

If you’ve given all your other circumstances and needs some thought, the last thing to consider is your job and other lifestyle factors. 

Physical or high risk jobs or hobbies pose a much higher risk of injury, and many people think they’ll be covered by ACC. It’s worth checking out what you’d really be covered for if you were injured in an accident, and whether it would be enough to cover your expenses.

It’s also worth remembering that although ACC provides cover in New Zealand for injuries, it doesn’t cover any illnesses so you may still want to top up your cover.

If you're trying to decide whether now is the right time to get some life cover, it's always a good idea to get expert help. An insurance adviser can offer advice tailored to your circumstances - if you want to find out more, we can put you in touch with a financial adviser.

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