Life insurance in my 30s? Too early!

>Question: Why do I need to get life insurance when I am still young?—Young Urban Professional

<strongAnswer: Here’s the typical script of a yuppie, whether from Gen X or Y, to an insurance agent when offered a life insurance policy. “I am young. I just started earning serious money. And here you are talking to me about death? With what I am earning now, it will take me just a few years to build up enough savings to match the coverage that your life insurance policy is promising. Plus, I have grand plans and your life insurance premium will just be an expense that will slow me down.”

For some reason, I can hear Richard Harris playing his favorite character of an old leader full of wisdom and experience, whether as Albus Dumbledore in the earlier Harry Potter movies or as Marcus Aurelius in Gladiator, and reacting to the above script with the line, “Ah, the folly of youth!”

I was once, and still prefer to think of myself as a yuppie. Alas, my age shows for even the use of the word yuppie is not in vogue anymore. Nevertheless, it is said that experience is the best teacher. So let me relate my experience as far as life insurance goes.

I believed I was superman in my late 20s and early 30s. I had a promising career with an attractive pay. I had lots of plans, all of them grand. So why would I need to get life insurance? The first life insurance I got was sold to me by the unit head of the aunt of a girlfriend who I didn’t end up marrying. As soon as my girlfriend and I broke up, I discontinued the life insurance policy.

The next insurance policy I bought was from a guy who belonged to the same religious group I was a member of. Because of his persistence, I reluctantly bought up to P1.5 million in life insurance coverage from him.

Do you see the pattern? I was buying life insurance only because it was being sold by friends and not because I saw it as something I genuinely needed. And then it happened. While undergoing an ultrasound for a suspected kidney stone, I was diagnosed as having the potentially life-threatening polycystic kidney disease or PKD. While my father had it, I was made to believe by my relatives that PKD would skip a generation. I was frantic to say the least. There’s nothing like the prospect of a shortened life to jolt you into action. I searched the Internet for organizations that supported research on PKD. I found one with a banner in its home page saying, “Don’t worry, you are not alone.” I checked the visitor count and found that I was visitor number 3. I visited the next day and found that I was visitor number 4. Well, so much for not being alone.

What was worse was I began to worry about my family. Questions like “When I’m gone, would they even have enough to eat?” and “Will my children still be able to go to school?” haunted me. And I had every reason to worry because my father died at the age of 44, leaving behind a 39-year-old wife and three children.

I looked at my life insurance policy and quickly determined that P1.5 million would not last long for my family. Unfortunately, I could not be insured for any additional coverage anymore. Whereas before I was being chased by insurance agents, now I was chasing them. One insurance company after another would deny me coverage. They would not even give me coverage at a higher premium or what they called “rated.” It was too late for me.

None of us know when our appointed time to leave this world is. We may live long or not. We may depart via a sickness, accident or through the normal aging process. But unless we are born into wealth, the typical path is that we have lesser savings and more expenses when we are younger. Only when we get older will we have more savings and lesser expenses. The problem occurs when we are called from this life early? What happens to those we leave behind? You may not have your own family yet, but what of your siblings and even parents?

Life insurance is a must. Don’t run away or hide from the insurance agent. He or she is persistent and seemingly pesky only because people have yet to realize the real need for life insurance. It is funny that we tend to insure our properties first before our life or what I can insuring bahay before buhay. But isn’t it true that it is the productive capacity of our life that gives birth to all of our properties?

So next time an insurance agent comes knocking, welcome him or her. He or she will be carrying the protection you will need against the risk an untimely demise. Buy early in your career as it is not only the time when you need it most but also the time when premiums are cheaper.

Stay safe and protected.

(Efren Ll. Cruz is a Registered Financial Planner, investment adviser and bestselling author. Questions about the article may be texted to 0917-505-0709 or e-mailed to [email protected]. To learn more about the RFP program, visit www.rfp.ph or e-mail [email protected].)