Youth is that period of life where you are largely free from responsibilities. Fresh out of college, you look for a perfect job to be financially free. With financial freedom comes financial responsibility, responsibility for self, spouse and kids (if married) and parents (if they are dependent). This responsibility is fulfilled by opting for various types of insurance and investment plans to ensure financial security. But what if you are single and your parents are not dependent on you? Does that mean that you do not need insurance?
Insurance, whatever may be the form, is a necessary part of a financial plan. If you have a family and dependents, insurance becomes all the more important. But if you are single and without any dependents, it does not mean that you can give insurance a miss. There are insurance plans which hold relevance even for carefree singletons. Take a look.
Life Insurance: ULIPs
So a term life insurance plan might not be a necessity for you right now. Life insurance is meant for financial security for your dependent family in your absence.
Since you are single, you can postpone buying a term policy till such time as you have dependents. However, if you absolutely must have a life cover, it might be a good idea to go for a unit-linked insurance plan (Ulip). You can invest in the debt and equity market through a Ulip while also getting a small life cover. Be prepared to remain invested in your Ulip for the medium to long-term for best returns on investment. Your premiums also help you save tax under Section 80 (C).
Health Insurance
This is very important whether you are single or have a whole family depending on you. Illness, disease and accidents choose their victims randomly. Individuals of any age can fall prey to accidents or illnesses. Given the rising medical costs, such medical contingencies have the potential to blow a big hole in your pocket. Since you may be young, your savings may be meagre and could be depleted quickly. If you want to protect your finances from such potential contingencies, buy a health insurance plan at the earliest. Health plans compensate the medical bills incurred on treating any medical contingency and as such act as essential requirements in your financial portfolio.
Critical Illness Insurance
Don’t you think that critical illnesses, like cancer or heart attacks, have become a common place nowadays? Earlier, these diseases picked the old. Now, the young are at risk. Are you susceptible to these diseases? Critical illnesses are called so because they can be fatal and require considerable funds for treatment. If a critical illness struck, you would find yourself in physical and financial jeopardy. Though health insurance plans provide coverage for treatment of such major illnesses, the coverage might be insufficient. A critical illness plan comes to your rescue. It is a specially-designed plan which pays a lump sum benefit if you are diagnosed with any of the plan's covered illnesses. So insure yourself under a critical illness plan in addition to a health plan.
Vehicle insurance
This one is a no-brainer. If you are the proud owner of a trendy bike or a humble car, you have to buy an auto insurance policy for your vehicle. Why? It is mandatory by law. However, a word of advice — when choosing an auto insurance policy, go for a comprehensive plan. Compared to a third party policy (which is legally mandatory) a comprehensive policy covers damages incurred by you and your vehicle, apart from damages to third parties. As such, a comprehensive motor insurance policy would ensure an all-round coverage for your vehicle.
Home Insurance
Whether you are a home owner or live in a rented accommodation, you have the option of insuring it against loss. If you own a home, you can cover it for damages caused by fire, natural calamities, riots, strikes, etc. Damages caused to your home would be compensated for by the insurer. If you rent a home, you can consider insuring the contents of your home. This would cover your belongings against the above-mentioned damages. Some insurers would also protect you against burglary and theft, subject to conditions.
Being single, insurance might be the last thing on your mind but it's time you start thinking about it. The above-mentioned insurance plans are beneficial at all stages of your life and so you should consider them at the earliest. After all, you have a responsibility to yourself, too.
