3 stats you need to know
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by Larry Klein
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We all feel invincible when we're young. It's true of every generation. We don't think about illness or death. And we take crazy risks that include everything from extreme sports, dangerous drugs, excessive alcohol, etc. You'll be entertained if your parents reveal to you the insane things they did in their youth. Then we learn with age and experience how to act and think more judiciously.
The few smart individuals take advice from their grandparents and parents. I say these young people are few and smart because they realize something that most humans never do:
Young humans find it quite difficult to take the advice of others (particularly from relatives) and seem hell-bent on making mistakes on their own. Indeed, how more advanced would we be as humans if we could just learn from the mistakes of past generations?
If it seems inefficient to ignore others' mistakes, then I'd like to tell you about some mistakes. But, I don't want you to take my word. I want to share a couple of statistics. I might add that another thing we humans like to ignore is statistics. We always think they apply to someone else.
According to a Harvard University Study, medical expenses are the biggest cause of bankruptcy, representing 62% of all personal bankruptcies.
In youth, we never think about illness or death. We believe that the above statistic applies to someone else. You may also think that health insurance is a waste because you are young and healthy.
You don't need to get sick to need health insurance. Anytime you get in the car, you run the risk of an accident with an uninsured driver. And no, your auto insurance does not provide the medical coverage you may need.
So you may be brazen enough to think, "It's no problem. They'll fix me up in the hospital and send me a bill. Since I don't have any assets, I'll just declare bankruptcy." The problem is when you were unconscious in the hospital, your parents showed up and told the hospital to do anything needed and they signed to accept charges. So instead of you going bankrupt, you do it to your parents.
Your top priority is to stop acting like a young person. Get health insurance if you don't have it. It is dirt-cheap for the young, and depending on your income, it may even get subsidized under Obamacare. My 31-year-old step daughter pays $42/month with the Obamacare subsidy.
83% of consumers say they don't purchase more life insurance because it's too expensive, but consumers believe life insurance costs nearly three times the actual price. Most Americans believe a 20-year, $250,000 level term life policy for a healthy 30-year-old costs $400 annually. However, $150 is what it would actually cost.
70% of U.S. households with children would have trouble meeting everyday living expenses within a few months if a primary wage earner were to die today. 4 in 10 households with children would immediately have trouble meeting everyday living expenses.
If you're single, you don't need life insurance. However, if you have a significant other or children, and they rely on your income, then get life insurance. Like health insurance, it's inexpensive at young ages.
If you say you love your partner or your kids and you don't have life insurance, you're a liar. Life insurance is something that no responsible person with dependents does without.
I know you are saving to buy a home or paying off student loans, etc. But without these two basic types of insurance, you can lose your independence permanently and take others with you.
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