More often than not, young adults dream of acquiring a luxury car, branded clothes and accessories, as well as a comfortable home as soon as they start working.
Then they go in pursuit of promotions or higher-paying jobs so that they can afford their desired lifestyle.
Material possessions aside, young people are generally less inclined to think about purchasing life or medical insurance policies as soon as they start working.
Could this be due to their lack of knowledge of the inherent benefits of having insurance coverage?
PREFERRING LUXURIES OVER INSURANCE
“Generally speaking, they are aware that it’s important to have insurance but possessing a car and other luxuries is their main priority,” said insurance consultant Yuhainizah Yunos, 33, relating her experiences with her younger clientele.
She said among them were some who were totally engrossed with spending their money on luxury cars and branded items while there were others who felt that insurance was not for them as they were still young and fit.
Then, there were the lucky few who already have insurance, thanks to their parents who took the policies for them when they were very young, said Yuhainizah.
“As soon as they start working, they take over the monthly premium payment commitment from their parents,” she said, adding that currently many insurance policies offered three-in-one plans, namely protection, medical and investment.
USING SOCIAL MEDIA TO LURE YOUTHS
Al-Isra’ Prudential BSN Takaful Agency Manager Raja Muhammad Ariff Shah Raja Muhammad, 40, meanwhile said various approaches could be used to lure young adults to commit themselves to insurance.
“I make use of social media like Facebook and Twitter, as well as blogs, to interact with youths and talk to them about the importance of having insurance coverage,” he told Bernama, adding that it was easier to reach out to them on these social networking sites.
He said while youths were more or less aware of the importance of insuring themselves, their interest in insurance was, nevertheless, on the rise.
“More than 15 per cent of my clients are in their 20s and 30s,” said Raja Muhammad Ariff Shah, acknowledging that insurance firms with young agents and consultants in their payroll have an edge over their rivals as it was easier for them to gain access to their target group.
He also urged young working adults to set aside 10 per cent of their monthly salaries for insurance.
“But they may have to adjust their lifestyles a little in order to pay the monthly premium. They can start with a small policy and slowly buy bigger ones as their incomes increase,” he said.
BEING PREPARED FOR FUTURE RISKS
Another insurance consultant, Mohd Zubir Umar Khan, 40, said he encouraged people to take insurance coverage while they were still young and healthy as the premium payments were lower. Older people buying insurance may find themselves paying higher premiums due to the loadings in view of their age and physical ailments.
“Some people tend to leave everything to fate, but there’s nothing wrong in being adequately prepared to face risks,” he said.
Mohd Zubir said almost 100 per cent of the population of countries like Japan and South Korea have some form of insurance coverage, with many of them even having two or three policies each.
He said should a tragedy befall the insured party, the insurance claims would come in handy to him or his family and help them to repay debts and other financial commitments, and even to rebuild their lives.
“If an insured person becomes permanently disabled or dies as a result of an accident, the insurance payout will help to lighten the burden of his family,” he said, adding that insurance benefits were subject to the type of policy taken.
INVESTING FOR THE FUTURE
Malaysian Youth Council President Muammar Ghadafi Jamal Jamaluddin said it was vital for youths to fully understand the benefits of having insurance coverage and to be adequately prepared to face any future risk.
“No one is forced to buy insurance or a protection plan but it will be good if everybody has one.
“This is because accidents can occur to anyone, regardless of age and the insurance claims can offset one’s hospitalisation and treatment costs,” he added.
Regretting the attitude of certain youths who viewed the monthly premium payments as a burden, Muammar Ghadafi said they should, instead, regard insurance as a good form of investment for the future.
CHANGING THE MENTALITY OF YOUTHS
Head of Universiti Putra Malaysia’s Department of Resource Management and Consumer Studies, Asso Prof Dr Mohamad Fazli Sabri, said it was unfortunate that youths prioritised material possessions over insurance coverage.
He said their lack of knowledge and understanding of risk management was one of the reasons for their disinterest in insurance.
“Just ask them about insurance and they will admit that they don’t know much about its benefits,” said Mohamad Fazli, adding that it would be worthwhile to expose fresh graduates to the workings of insurance policies, as well as their benefits.
He also stressed that youths should change their mentality that insurance policies were not meant for them as they were still young and disease-free.
“As soon as they start working, they should take a policy, in accordance with their affordability. At least with this commitment, they have some protection in store for themselves,” he added.