Do young people need life insurance?

The development of society has contributed to creating great changes in people's consumer culture, in which many young people today are still carefree and lack of calculation in spending with the familiar reason "youth is only once". Many people save only to serve material needs such as buying clothes, vehicles, phones or traveling. There are very few young people who are aware of saving early to protect themselves from health and financial risks in the future.

Ngoc Tu (24 years old, Hanoi) is a fresh graduate and has been accepted to work at a foreign company with a relatively good salary. Unlike his peers, Tu is independent and has an open and progressive mindset, so he has soon formed a sense of taking care of his health and managing his finances. Every month, Tu sets aside a small portion of his income to buy a life insurance package that fits his ability. At that time, many people around him discouraged him because they thought Tu was still young and healthy, so he did not need insurance. However, the recent prolonged Covid-19 pandemic has made Tu's work not as good as before, so his income has decreased a lot, and his savings since starting work have also decreased by more than half. Luckily, with insurance, Tu feels more secure because if he gets sick and needs treatment, the insurance company will pay, otherwise it would be difficult to manage with the small amount of savings left.

This year's Tet bonus is not as abundant as usual, so Ms. Hoa (Phan Rang) and her husband decided not to spend much on shopping or decorating the house. After Tet, their eldest daughter will move to Ho Chi Minh City to attend school. It is the first time their child is away from home, so parents like them cannot help but worry. Therefore, after much consideration, they decided to buy their child a life insurance package in case of illness, as well as a savings for their child. For them, this is also a meaningful gift to prepare their child for adulthood. She plans that after her daughter graduates and has a stable job, she and her husband will transfer this insurance package to her to continue maintaining. This is also a way for them to teach their child about health protection as well as personal financial management.

Many families buy life insurance packages as a preparation for their children who are about to leave home for college. Illustrative photo.

Despite their progressive ideas, Hoa and Tu's families are still just a few of those who know how to save and protect themselves early against unexpected risks. According to statistics, the insurance participation rate in Vietnam is still very low, accounting for only about 10% of the population. Meanwhile, in many countries around the world, this rate is very high. For example, in Japan, nearly 100% of people have life insurance, even for newborn babies, parents are aware of equipping their children with insurance. Mr. Luu Anh Tuan - Senior Director of Product Management of Prudential Insurance said.

According to Mr. Tuan, “The rate of Vietnamese people participating in insurance is still low, stemming from two main reasons: People's understanding and trust in insurance is still limited. Besides, many people also think that if you are young and healthy, you do not need insurance or that insurance is only for people with money. These are not entirely accurate statements. Everyone should have insurance. Sometimes you only need to spend an amount of money each day equal to a cup of coffee to be able to buy yourself an insurance contract.”

In fact, insurance makes a lot of sense if we understand the benefits it brings early. The pandemic has shown that the best vaccine is the one that is given early, and the same goes for insurance, the earlier you get it, the more beneficial it is. The first benefit that can be seen is the low cost and high insurance approval rate for young people. In the 20-30 age group, the risk of illness or life-related risks, although there is, is not high, so the insurance premium will be lower than for middle-aged people and people with health problems.

In addition to being protected against the risks of illness, unexpected incidents, insurance contracts today are also a safe and effective way to save and invest, especially for investment-linked insurance products that are currently popular. Long insurance participation periods will help the contract to be invested, accumulated and generate better profits.

Reasons why young people should get insurance early.

Moreover, with the habit of “spending first, saving later” of young people, participating in insurance early is also considered a way to build habits and form discipline in spending. It can be said that insurance is an effective practical lesson to practice personal financial management skills that everyone needs to have.

With so many unpredictable things that can happen, it is never too early to think about health and financial security for yourself and your family. Insurance today has become a financial protection solution for everyone at every journey, every important milestone in life. It also carries the meaning of responsibility, love and care for loved ones as well as for yourself.

PV