When should I start to buy Insurance?

This is a difficult question to answer especially when you consider the sheer range and variety of insurance cover that is available for various needs. These needs will arise at different points in your life and may also vary from time to time so that a decision on every need will have to be examined in detail and on its own merits. For instance, if you buy a car, you will need to take out some form of third-party insurance before you can take it out on the road because this is the requirement in law. You can go beyond the basic insurance to take out whatever form of cover you think you can afford such as comprehensive insurance to cover the cost of repairs and spare parts. In the case of life insurance, you should aim to cover yourself as soon as you have a family for whom you need financial protection should something happen to you. You may simultaneously wish to take out accident and disability insurance to cover medical expenses in case of an accident and to protect your income in case you are partly or fully disabled.

In the case of accident insurance or disability insurance, many young people believe that they do not need the cover because nothing is going to happen to them. Yet, even if they carry adequate medical insurance, disability insurance give some income protection at a time when their savings may not be adequate enough to compensate. The time to take out this insurance is as early as you can as is the case for health insurance because the younger and healthier you are, the lower the premiums that you will pay. When you have accumulated a few nice things in the house, such as a computer or a fancy TV set, you should contemplate insuring them so that if something should happen, you do not have to replace them from your own pocket.

Let us consider long-term-care insurance protection in order to help you to understand what is involved. In long-term care insurance, you should first establish what assets you possess because they will need to be liquidated to afford the long-term-care expenses if you are not properly insured. If your assets are in the region of $2 million, you probably have enough money to do without long-term care insurance. If your assets are less than $200,000, the premiums that you can ill afford to pay better utilized for your day-to-day living expenses. You will of course have to pay for long-term care should you require it out of your pocket till you become eligible for Medicare. However, if your assets are between $200,000 and $2 million, you should seriously consider long-term care insurance in order to protect your assets.

If you take all these factors into account, you should start to look seriously at the possibilities of buying long-term care when you are in your early 50s. You should evaluate your overall health and lifestyle to assess the risks that you are running which may require long-term care. You should also evaluate your financial position and the likely income that you will earn till you retire.

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