Why take out life and health insurance in your 20s?

When we’re in our 20s, we have our whole life ahead of us. No matter how much we'd like to sail through life without adversity, no one can predict the future. And we also have to remember that what happens to us can also affect the people we care about. Discover our life and disability insurance products, the advantages they offer and how to choose the right coverage for you.

What’s the purpose life and disability insurance?

Life and disability insurance are examples of coverages that are part of your group insurance plan or that can be purchased individually if you don't have group insurance or if they don't meet your specific needs. Each of these insurance products is used in specific situations.

Life insurance can make it easier for your loved ones to pay off your loans and other debts after you die.  It can also be used to leave them a bit of money, so they can maintain their standard of living, cover your bills and funeral expenses or take care of your pet.

Disability insurance helps protect your income if you're unable to work because of an illness or accident.

Disability insurance offers many benefits. For example, if you were unable to work indefinitely due to illness, physical injury or depression, you'd still be able to keep up with your financial commitments, like paying your debt and monthly expenses (rent and bills, etc.) with no interruption. A situation like this could be very stressful, so it’s a good idea to avoid any additional sources of worry!

In addition to helping you pay your bills, disability insurance can also protect your credit score. You may not always think about it, but falling behind in your payments could get you into trouble. A healthy credit score will help you keep your dreams and goals on track, no matter what they are. After all, when you’re in your 20s you’re just getting started!

Take stock of your situation and needs

If you’re young, in good health and don’t have kids, it’s only natural to wonder if you really need individual insurance. You may even be covered by your parents' insurance or by your educational institution if you're a student. Whether you’re single or in a relationship, studying or working, you definitely have financial responsibilities, like:

• Credit card payments
• Rent
• Utilities (like phone, Internet, cable and hydro)
• Car payment
• Student loans

Maybe you have an emergency fund to cover unexpected expenses, or some money set aside for something special you want to do. If you had insurance, you wouldn’t have to dip into your savings. That's why it's important to carefully review your needs and financial commitments so you can choose the right coverage.

What should I know before choosing coverage?

When you’re ready to choose the best coverage for you, be sure to find out about any coverage you’re already eligible for, and the scope. For example, if you’re covered under your parents’ group insurance, it usually ends when you leave home or after a certain age. The same applies if you took out insurance offered by the college or university you attended. If you’re still covered for a few years, find out if it’s enough for your needs, because our lives and responsibilities are constantly changing.

Are you entering the workforce or changing jobs? You might be able to get insurance from your employer or a professional association you’re planning to join. If so, take a close look at what’s included and what’s optional, as it might not be enough for your needs. 

A financial security advisor can help you understand the differences between the different types of insurance, assess your needs and recommend the right coverage for you. You can buy insurance at any age. However, you should reassess your needs whenever a major life event occurs to make sure you have the right coverage now and in the future.