When Is The Best Time To Get Covered? Insurance At 3 Life Stages

Updated on July 28, 2022

Life throws different challenges at us all the time, and the risks that concern us will change depending on where we are on life’s journey. Buying insurance is a significant investment, and you’ll want to invest wisely, that explains why most people analyze their needs for insurance based on their life stages. 

If you are planning for your first insurance plan, you are suggested to divide your life into 3 major stages, and then think about the risks and expenses you need to bear in different stages before choosing the right insurance coverage.

Stage 1: After Graduation

In any stage of life, everyone is subject to illness and injury, and health is an inevitable part of it. Therefore, you should prioritize the purchase of medical insurance (health insurance) to ensure that your quality of life will not be affected too much in case of any accidents. In order of priority, the primary protection for young people should be (1) medical insurance, (2) cancer insurance, and (3) term life insurance.

Since hospitalization insurance can cover medical expenses of any size, a hospitalization insurance policy can provide adequate and comprehensive medical coverage. 

Meanwhile, young people are more likely to develop cancer than high-risk conditions such as cardiovascular disease and coronary heart disease, so the need for cancer coverage is greater than for critical illness coverage. You can choose a plan that focuses on medical coverage for surgery, hospitalization and medications. Of course, there are also health plans that cover additional expenses beyond medical care, such as transportation, reconstructive surgery, wigs, etc. However, the premiums for these plans are generally higher and you should consider whether you need these additional benefits before taking out a policy.

Whether or not you need life insurance depends on whether you are the breadwinner of your family and whether your family depends on your income. If you are an only child and your parents are aging and then losing their ability to work, you may need to buy a life insurance policy for yourself to protect your family.

Stage 2: After Marriage

After you start your own family, you will need to purchase health insurance for your partner and children. There are health plans available for families – if you and your partner have a group insurance plan with your company, it is important to weigh the premiums and benefits of a family health plan versus an individual health plan. If you choose to continue your own health insurance, be reminded  to consider whether you need more coverage.

When it comes to life insurance, as mentioned above – it depends on whether your family is dependent on your income for their livelihood. If your significant other is taking care of the family full-time and has no income, in effect you are the breadwinner, then you may need a life insurance policy to protect your family. Also, some might wonder if they need life insurance for their children. Normally this is not necessary because the child is not the breadwinner of the family and his/her departure will not bring financial loss to the family. Of course, when he/she becomes an adult and starts working, if his/her parents (i.e., you and your significant other) depend on his/her income, then he/she may need life insurance to protect you and your significant other.

In addition, since children are more likely to get injured and sometimes might have to visit the clinic to have their wounds cleaned or even admitted to the hospital for stitches, you as a parent, may need to consider taking out accident insurance to protect them from medical expenses resulting from accidents, regardless large or small.

If you haven’t finished paying off your property loan, you may also want to purchase life insurance for your property to protect your family from the heavy burden once you were to leave suddenly.

Stage 3: Pre-retirement

Before you retire, you are supposed to have a certain amount of fortune that you can use to safeguard yourself or pass on to your children. Therefore, your need for life insurance is relatively reduced. You are encouraged to set the end date of life insurance at your retirement age and gradually reduce the amount of coverage as you get older. One bonus tip is you can transfer your wealth to other investment products, such as annuities or qualified deferred annuity policies to enjoy tax benefits.

About the Author

As Hong Kong’s first virtual life insurer, Bowtie is dedicated to making insurance great again by filling the current health coverage gap. In line with our continuous effort, Bowtie is proud to be ranked #1 in the direct sales channel throughout 2021. We also care about public health, so continuously sharing insurance, medical and health tips to support your health journey.

Learn More:https://www.bowtie.com.hk

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The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.