The question in the title is short, but there’s a lot to unpack. You’re young: what does that mean? Under 25? Under 40? Under 65? Young is relative. You’re healthy: what does that mean? You’ve never broken a bone? You’ve never had a major surgery? You don’t have any serious diseases?
And finally, do you need insurance? The answer to this is a bit more clear. You don’t need most things – there are, instead, things that you want. You want a house, because you want a place to live. You want home insurance, because your home is your most valuable asset, and if you were to lose it, your way of living would be shaken to its core. You hope to never use home insurance, but you have it nonetheless. That’s true no matter how young and healthy you are.
Of course, when people are asking whether they should buy insurance while they’re in their prime, they’re usually asking about life insurance and critical illness insurance. The purpose of both of these types of insurance is relatively simple: they serve to replace (among other things) lost income should you become very ill or injured (in the case of critical illness insurance) or pass away (in the case of life insurance).
So, if you’re young and healthy, should you get critical illness or life insurance? The answer is probably yes. In all likeliness, you won’t actually need to use the insurance – that’s the best-case scenario. When you’re young and healthy (that is, when you don’t have pre-existing conditions), your premium for critical illness or life insurance will be quite low. The advantages should the worst-case scenario occur, however, can be an incredible lifeline.
When you’re seriously injured and can’t work, you have to rely on your savings and money from the government. The maximum disability pension offered by the Canada Pension Plan is $1387.66/month (as of the writing of this article in August, 2020) – not nearly enough to replace the income of most Canadians. You don’t want an accident or serious illness to stop you from working, and in all likeliness it won’t – but is that a risk that you can take?
The same idea is true of life insurance. Though life insurance may be a less important option if you don’t have a family, if you do have a family, and your income is essential to your family’s way of life, you should get life insurance. Thinking of these worst-case scenarios can be painful, but aversion to planning for the worst doesn’t mean you shouldn’t do it. You might be perfectly healthy, but a car accident can end that in the blink of an eye. That was uncomfortable to write, and I imagine it was uncomfortable to read. But it’s true, nonetheless.
Have you looked into critical insurance and life insurance? Though it’s impossible to evaluate whether or not you’ll feel life and critical illness insurance are worth it, we think they are. The premiums are much lower when you’re young and healthy, and the benefits, though we hope you’ll never need them, can be a lifeline in the hardest of circumstances.