These are 3 Reasons Insurance Remains Important for the Investment Generation

One of the unique behaviors and financial mindsets of generation Z and millennial young people is their penchant for investing early.

A global study conducted by Schroders on more than 25,000 investors in 32 countries revealed that those between the ages of 18 to 37 (generation Z and millennials) save and invest almost 16% of their annual income.

That's in contrast to previous generations who tended to view investment as a "sideline" strategy because of the risks that were considered large and unsafe, so they preferred to save in the form of life insurance, health insurance, and so on.

The same research revealed that those aged 38 to 70 years (generation X and baby boomers) only set aside about 14-15% of their income for savings and investments.

So, which is more important, insurance or investment?

The answer is that both are equally important because they have a positive impact on financial arrangements and form a good risk management system in the future.

Here are 3 reasons why it is important for young people to have insurance early on.

1. Provide Protection and Tranquility in the Future

Insurance, regardless of its type, aims to provide us with protection and minimize the risk of bankruptcy / having to spend a lot of money at once when an accident or unwanted things occur. By having insurance, it's like, you save money to prepare for all possible accidents/illnesses in the future. 

Let's say, at the age of 30, you experience severe pain that makes you have to be operated on or given considerable or serious medical care. You need to pay at least $1000 to complete any of these processes.

If you don't have health insurance, then, right then, you'll have to spend $1000.

But, if you already have insurance, it is your insurance company that will cover the medical expenses. That also doesn't include the other benefits you can get from the insurance company. 

These emergency needs cannot all be met with investment returns alone.

One of the disadvantages of investing is that, if you want to cash out your money/principal capital, it takes a few days to be able to go directly to your account or into your pocket.

So, if your needs are very urgent, relying on investment as the only handle is not a wise thing.

2. Reduce the Possibility of Debt 

Well, when you have to spend a large amount of money at one time, but the amount of your savings or cash is insufficient, automatically, you have the potential to take out a loan or go into debt.

The possibility of going into debt will be minimized because the unexpected costs will be paid by the insurance company from the premiums you pay every month.

Insurance disbursements are also generally fast if you have followed the procedure.

3. Cheaper Premiums

When you register yourself with an insurance company, there is a certain amount of money that you have to pay every month, or called a premium.

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