The advantages of getting insurance while you're a student

Motshabi Nomvethe, Product Specialist at PPS

When it comes to thinking about financial planning, many people in their twenties falsely believe that insurance is only something they need to worry about when they start a career or family. This is a huge mistake because there are a number of advantages to becoming insured at a younger age.

Advantage number one: You are in your healthiest life stage

You will most likely never be as healthy as you are in your twenties. Insurance companies factor in your health when determining insurance premiums, especially for medical and life insurance policies. The healthier you are, the cheaper your insurance premiums will be. 

The dangers of waiting until your thirties or forties to take out life insurance, is that should your health change for the worse, you will find it harder to find an insurance provider willing to provide you with the same level of cover than had you started out when you were young and healthy at the same premium. Some insurance companies may even refuse to provide you with cover at all if your health is really poor. 

Advantage number two: Peace of mind

While it is not pleasant to imagine the worst, it is important to plan for unfortunate and unforeseen events such as disability or permanent incapacity. Imagine you have just started working and you are involved in a terrible accident that leaves you disabled. How are you going to afford to live and pay rehabilitation bills if you cannot earn the salary you studied for? 

This is especially daunting if you have started to accumulate debt and owe money for items such as student loans or motor vehicles. This is why life insurance can bring you comfort in knowing that a significant portion of your income will be paid out to you in the event that you are no longer able to perform your profession. 

Advantage number three: Your dependents are taken care of

Another important thing to remember about life insurance cover is the money that will be paid to beneficiaries upon your death. Many people in their twenties already have children or parents who are dependent on them to bring in a salary. In addition, many people in this age bracket have significant debt as a result of student loans and other expenses, which will need to be repaid in the event of their deaths. Having a life insurance policy in place will ensure your family is not left financially destitute should you pass away. 

Advantage number four: Saves you from sudden financial loss

There is no doubt that insurance is often considered a grudge purchase – people do not really want to spend money on something they might not ever need. However, when the need does arise – such as a motor vehicle accident or theft – short-term insurance will enable you to repair or replace your possessions to their original state. This is especially important for younger people, who have often not yet built up savings that they can draw on for “rainy day” purposes. 

Advantage number five: Ensuring a solid financial future

It is important to lay the foundation now for a solid financial standing in the future. If you are confused about where to start, there are plenty of helpful financial advisors out there who would be more than willing to assist you with your specific insurance requirements. 

At PPS we have noted that 47% of our new business sales in the last year were to young people in their 20s. It is very positive to see that some young people do realise the importance of insurance however, more young graduates in their twenties need to consider the financial consequences of not having proper insurance cover in place at an early age.