Lower premiums are one of the benefits of getting a life insurance policy and income protection when you are young and less of a risk.

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When you are in your twenties, with life stretching out ahead of you, life insurance is not high on your list of priorities. However, you future self might want to say something about that.
When it comes to protecting your income should you become disabled or pass away, many young people in their twenties and thirties think it is something to worry about “later”, after you bought a home, climbed the career ladder, or started a family.
However, Sean Hanlon, executive director at brightRock, says this mindset can end up costing more than you realise. “Have you ever thought about how many pay cheques stand between you and your retirement?
“The younger you are, the more income you still have to earn and that is actually your greatest financial asset: your ability to earn a salary is what makes everything else in your life possible, from rent, groceries and savings to future investments.
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Taking out life insurance in your twenties makes good financial sense
“That is why protecting it early with income protection cover makes good financial sense. And yet, many young professionals fall into the trap of putting it off. Why? Because of a little thing called present bias.”
Hanlon says present bias explains why it is easy to ignore long-term planning like life insurance or income protection when you are young and healthy.
“The idea of a life event that could stop your income, like a serious illness or even death, feels remote. Instead, we focus on what is right in front of us: student loans, social life, helping out at home, or upgrading our tech.”
But ignoring the risk does not make it go away, he warns.
According to a BusinessTech poll, more than one in three (35%) middle-class South Africans are not saving for their financial future. This means people are unprepared for any unexpected loss of income that could derail their financial progress overnight.
Most of us insure our homes, cars, businesses and possessions but neglect to protect our income, despite it being the thing that pays for all those other things. But if something happens to you that interrupts that income stream, your entire financial ecosystem could be under threat, Halon says.
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What if something happens to you tomorrow and you have no life insurance?
“Think about it: over your working life, you will earn hundreds of pay cheques. They are the building blocks of your lifestyle and future plans. But what if something happened to you tomorrow that stopped those pay cheques from coming in, like an illness or disability?
“Protecting your income is not just for people in their 40s with mortgages. It is something every working young adult should consider. Taking out income protection early means you are covered when you have the most pay cheques left to earn, and you will likely lock in lower premiums while you are still young and healthy.
“Over time, as your income grows, your cover can grow with you, ensuring that your lifestyle remains secure, even if your ability to earn is compromised by an illness or injury.”
Hanlon says the same way compounding works for saving money, early planning works for life insurance and income protection.
Starting late means paying more for less, as your risk profile will have changed, and cover is more expensive when your risk of claiming is higher.
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How to break the present bias cycle
You can break the present bias cycle by:
- Starting small and scaling up. You do not need to get everything sorted on day one. Even a basic life policy or income protection benefit gives you a foundation to build on. If you do not have financial dependents, start with disability cover and add life cover later, when your death would impact people who rely on your income.
- Educate yourself. The more you understand about how life insurance works and why it matters, the easier it is to commit.
- Speak to an independent financial adviser. Get tailored advice that helps you align your protection plan with your life goals, and remember to regularly meet with your advisor.
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