10 Reasons Why Millennials and Gen-Z In Malaysia 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 you “live in the moment!” it helps to plan ahead and insure yourself against life’s uncertainties.
We have got 10 reasons why, but before that, here’s a short explanation of who are millennials and Gen Z.
Who are Millennials and Gen Z?
You’ve probably heard of the terms, but who exactly falls under these two categories? Millennials are the generation born between 1981 and 1996, while Gen Z is those who are born between 1997 and 2012. Millennials are sometimes referred to as Gen Y.
Why do Millennials and Gen Z need insurance?
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. 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. 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.
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. Spare your family from debts
Chances are, you’ve likely taken out a loan. This might be for your studies, to buy a car or purchase a house. No matter what the loan was for, many of us are still in the middle of repaying our debts. The question is, who will pay off your loan or mortgage if something happens to you?
A life insurance policy ensures that your family is not saddled with your debt if you, unfortunately, pass away. This is even more important if you have a co-signer for your loans.
6. Protect your business
If you’re running your own business, life insurance for business owners will protect your company and loved ones if you pass away. The payout can supplement cash flow, cover daily business expenses or pay debts. Additionally, your dependents can maintain their lifestyle with the insurance payout and have peace of mind instead of dealing with financial strain.
7. Secure your family's lifestyle
You may have a young family who depends on you financially if you’re a millennial. Your children’s future is important, and a life insurance policy helps ensure that their expenses are taken care of should you suffer total and permanent disability or pass away. Your life insurance policy can provide the money needed for daily expenses, your house mortgage and your children’s education.
8. Cover funeral expenses
Funerals are extremely costly these days. According to Malaysiakini, the average funeral costs in Malaysia are as follows:
Muslim burial - RM1,000
Hindu funeral expenses - RM8,000 to RM20,000
Buddist/Taoist funeral - RM12,000 to RM40,000
Christian funerals - RM10,000 to RM26,000
The last thing you want is to have your family worry about your funeral expenses if you should pass away. A life insurance coverage allows your family to give you a good send-off without having to bear expensive burial or funeral costs.
9. Supplement insurance provided by employers
Many companies provide basic insurance coverage for their employees. While this is commendable, the coverage might not be enough, especially if you’re the main breadwinner in your household.
Also, you might not be able to continue with the insurance provided by your current employer if you were to change jobs. This means that you’d be left without protection and buy a policy on your own at a later age, which is inadvertently more costly.
10. 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.
Insurance for Millennials and Gen Z Malaysians
There are many insurance companies and types of insurance policies in Malaysia. However, if you’re looking to purchase insurance, it’s always best to do so from reputable insurers.
Additionally, you should research the most suitable plan for your needs and budget. Be aware that different plans offer different coverage levels; thus, the premium isn't the only factor you should consider when taking up an insurance policy. For example, a lower premium life insurance policy might not include medical coverage. Hence, you won't be able to claim hospitalisation or doctor's visits.
For more information speak to a Prudential Wealth Planner with solutions in life and health insurance; in addition to life insurance, we can also advise you on savings plans and how to prioritise and plan ahead.