Insurance Based On Life Stages: How To Choose Correctly

Choosing the right insurance based on life stages is important to ensure you’re not wasting your money away or losing out on something you truly need.

Almost everyone goes through the same stages of life, which looks something like this: school > college/uni > work > get married > start a family > become an empty nester > retire. Of course, not everyone will go through such a path to a T.

However, you live your life, it’s important to have the right insurance that fulfils your needs at that particular point in your life.

With so many different insurance types to choose from, it can get overwhelming, especially for those who are not very familiar with how insurance works and its different terms and policies.

Three major insurance categories, each with various different plans

In Malaysia, there are at least three major insurance categories with different plans under each of them. Here’s an example:

• Health/medical insurance
  Under this category, plans include medical care, surgery and hospitalisation coverage, income insurance (for those who are hospitalised), and critical illness coverage.
• General insurance
  Plans under this category include personal accident, travel insurance, and motor insurance.
• Life insurance
  There are two plans to choose from for this category: either opt for term life coverage or whole life coverage.

Consider a few things first…

Not all plans are created equal, even if they’re of the same category. Each has its own unique features, with different payment terms, benefits and policies, which is why you need to choose carefully when you shop around for insurance.

When you’re planning to buy insurance, consider your lifestyle, how much you can afford the premium, and your particular needs (for example, how often you will see your doctor). 

Choosing the right insurance based on life stages

So how exactly do you choose the right insurance based on life stages? Let’s have a look at these four major life stages that most people would go through:

1. Young, single 20/30-somethings or the career ladder climbers

Striking out on your own can be daunting, but with the right insurance plan, rest assured that at least you’re financially covered should anything happen.

The best time for you to get insurance is when you’ve settled into your job. Assuming you’re just starting out with no dependents or if you’re an ambitious career ladder climbers, these are the types of insurance to consider:

• Health/medical insurance
  No matter how young and healthy you are, life is unpredictable. Accidents and critical illnesses could happen anytime.

  With health/medical insurance, you will be covered in terms of medical expenses and hospitalisation (normally at private hospitals) or your income if you’re hospitalised.

  Of course, all of this depends on which type of plan you’ve selected. Note that the younger and healthier you are (cheers to the non-smokers!), the cheaper the insurance will be in most cases.

• Motor insurance
  Motor insurance is compulsory for anyone who owns a vehicle, be it a car or a motorbike. So, if you own a vehicle, you must get motor insurance under the Road Transport Act 1987.

  There are a few types to choose from: comprehensive coverage, theft and third party fire coverage, and third party coverage. Here’s the lowdown on each of them:

i. Comprehensive coverage

The most recommended coverage as it covers pretty much everything, in the event where there’s damage to your vehicle because of accident, loss or damage to your vehicle due to theft or fire, damage to another party’s property, and injury or death to another party.

It also offers optional benefits (subject to agreement), for example, Personal Accident and Medical Benefits for driver and/or passengers, windscreen breakage cover, or coverage for damage to your vehicle caused by natural disasters or civil commotions like riots.

ii. Theft and third-party fire coverage

This kind of coverage protects you in the event of loss or damage to your vehicle caused by theft or fire, damage to another party’s property, and injury or death to another party.

iii. Third-party coverage

This coverage only covers damage to another party’s property and injury or death to another party.

• Travel insurance

  If you LOVE to travel and are a frequent jet-setter (whether for business or for leisure), you must have travel insurance, especially if you often make overseas trips. 

  In the event of travel-related risks such as lost passport, lost luggage or luggage delay, medical emergencies, flight delays, or cancelled flights, rest assured that you’ll be protected financially.

2. Newly married couples

Married people have more financial responsibilities, so review your insurance plan to cover you and your spouse. For couples without children, consider these two:

• Home insurance

There are various coverage options for homeowners to choose from, for example, full theft coverage, protection against disasters, and more.

• Life insurance

If you died or facing a critical illness or permanent disability, your beneficiaries will receive a sum of money. There are two types of life insurance: whole life coverage and term life coverage.

3. Couples starting a family

When you are expecting, things like regular health check-ups, hospitalisation or even surgery could add up. Look for insurance with maternity benefits to lower your expenses.

For medical insurance, some benefits include pregnancy care, child care, and child development disorder care. Once you have your child, it may be wise to revise and upgrade your life insurance.

Additionally, you may opt for education insurance, which normally offers your children coverage until they turn 25. Look for a plan that combines savings, protection and investment elements, and benefits like education bonus payout.

4. Empty nesters and retirees

With the kids all grown up, you may no longer have dependents. Your debts and loans may have finally been paid off too. At this point, unless you’re still working, you may no longer need disability coverage.

Additionally, review all of your current plans and decide whether you still need them or not. You might need to keep some of them to ensure your spouse will be fine financially.

Make sure to choose the right insurance based on life stages. This is to prevent you from wasting your money away or losing out on something you truly need. Also, remember to compare the benefits, terms and policies when insurance shopping.

Simply use a comprehensive online marketplace for insurance to seek advice, compare insurance and get quotes instantly without the trouble of going from place to place.

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