Young and savvy

Beat ticking clock of rising premiums

Insurance payments rise with age, so don't put off that chat with your agent

As another birthday looms, something that I have always meant to get around to doing before I become too old has been weighing on my mind.

Sure, it looks set to be lengthy, painful and almost prohibitively expensive, with no promise of reward at the end, but I will most likely be glad of it many years down the road when supporting myself becomes harder.

Despite its vital importance, the process of buying insurance makes me feel as though I am wading into a murky world where the rules are probably stacked against me.

I say "probably" because I am not certain I know what these rules are in the first place.

To be sure, I was lucky to have had a head start in this area. My parents had the foresight to buy some policies for my sister and me while we were younger, which I am grateful for now.

I knew that I would have to top up the coverage on my own once I gained financial independence. But naturally, I dragged my feet.

I paid little attention to letters from the insurance company in a vain and entirely illogical hope that my ostrich-like behaviour would make them go away.

My employer provides fairly decent medical insurance, and I used that as an excuse to put off getting my own.

After all, confronting the myriad possibilities of my inevitable expiry is not my ideal way of spending the weekend.

However, I have come to regret that procrastination after meeting up two weeks ago with an insurance agent I got to know through a friend.

As we sat down in a cafe on a muggy Saturday afternoon to go over what coverage I would likely need, a song by Elliott Smith came on over the sound system. The singer-songwriter was believed to have killed himself at the age of 34 - it was as though the universe had read my mind and decided to throw in an equally depressing soundtrack.

The discussion took about 21/2 hours, which was far longer than I had expected.

What surprised me more - in a good way - was that my new agent devoted a huge chunk of time to explaining the lay of the land before we moved on to anything else.

She went over what main types of policies were available - term, whole life, endowment and investment-linked policies - and how they worked.

She also laid out the various areas of possible coverage and explained, step by step, how my current policies fit within that overall structure.

It was the first time anyone had taken the trouble to make sure I knew how things worked.

It was the opposite of what had happened in many of my previous encounters with insurance salesmen, whose hard-sell tactics put me right off.

I found out from the walk-through that while I was probably adequately covered for hospitalisation and the later stages of critical illnesses, I didn't have any coverage for their earlier stages.

I also didn't have any accident coverage or income protection, for instance.

If I had taken the time to find a good agent earlier, I would likely have been able to avoid the current mad rush to figure out what insurance policies I should lock in before I turn 26 in a few days.

Why the hurry? Well, insurance premiums often depend on your age at your next birthday, as I have learnt.

Besides still being eligible for youth discounts in Europe, 25-year-olds turning 26 get to pay less for insurance premiums than those a year older.

The difference between being 25 and 26 worked out to about $150 extra a year for the plan I was buying - which is not a lot, but is still money.

Younger people generally pay lower premiums due to their relative good health and lack of pre-existing medical conditions.

This, I assume, is because they haven't had the chance to spend as much time doing terrible things to their bodies such as not sleeping enough, taking cabs too often and developing an unhealthy addiction to Belgian speculoos spread.

Another reason I thought I should buy insurance early: Recent health scares in my family as my parents age.

I also know friends only slightly older than me who have come down with various major illnesses that are likely related to the pitfalls of modern-day, 24/7 work-life integration.

With my irregular working hours, there is always a chance I am not out of the danger zone even if I don't smoke, don't drink very much and take nutritional supplements regularly.

At any rate, the whole point of insurance is to spread risk, and I don't mind subsidising the medical fees of those with more health problems as long as I stay healthy.

Even if I do end up not making use of any of the policies I have bought, that can only be a good thing, notwithstanding the initial sticker shock from the price tag.

"Happiness is nothing more than good health and a poor memory," reads a quote from Nobel Peace Prize winner Albert Schweitzer on a postcard that hangs on my door.

The latter might not make my boss very happy though, so as I blow out the candles this year, I shall wish only for the former.

melissat@sph.com.sg