7 Reasons People Don’t Buy Life Insurance
A lot of families choose to buy life insurance in case tragedy struck one, and the other was left to pay the mortgage. Many policies help grief-struck widows (and spouses) pay the mortgage. However, these policies generally benefit people who have dependants. With that in mind, here are 7 reasons why people don’t buy life insurance – and why they may need reconsidering.
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- Too Expensive
LIMRA asked people how much they thought a life insurance policy ($250,000) cost for a healthy person in their 30’s. Those surveyed under age 25 estimated $1,000 a year – a preposterous numeral. People over that age, however, gave a more reasonable $400. The actual cost was between $100-175. The younger people are, and the healthier they are, term life insurance costs as little as $20 per month.
- Low Priority
In the survey conducted by LIMRA in 2013, more than half of respondents listed “other financial priorities” as the reason they didn’t get life insurance on themselves, their family members or spouse. In fact, more than 60% of consumers make saving for retirement a higher priority than getting life insurance.
- Only Offered By Employers
$50,000-100,000 sounds like a lot of money doesn’t it? This is the coverage benefit offered by many employers. This amount seems like a lot, and is why many people don’t take out policies on their own. While that amount seems substantial, it isn’t until you realise that you (and your family) spend more than $21,000 annually. In less than five years, it will all be gone.
- Distrust
With the amount of corrupt agents and companies whose sole purpose is to steal from customers and rip people off, consumers are skeptical about insurance companies. The problem is that there are a number of “good guy” companies. IntelliQuote compares several companies who are on the level and on the straight and narrow.
- Healthy
Wayne Gretzky, Richard Froning, Michael Phelps. They inspire images of immortality and superior human strength. Even if you are in the healthiest shape (and optimized to the fullest point) of your life, death and illness can strike at any moment. Insurance policies are primed for healthy people; fatally ill people (who may pass in a few months or years) are less likely to receive coverage.
- No Dependents
The Consumer Federation of America once said: “People without dependants don’t need life insurance.” A big reason many people don’t get life insurance is simply because they have no children or family members who rely on them. If you don’t have any beneficiaries who will receive the money from that life insurance, there is little point to take out an insurance policy.
- The Application Process
In order to ensure that customer premiums are correct, the life insurance policy application process is dutifully thorough. This process, which can be admittedly complex at first glance, deters a lot of people. Companies ask intrusive and intensely personal questions; questions are thorough in order to discover every detail of your health history. When you pass, they are legally responsible for the amount of money in your policy; therefore, in order to gain an idea about your life expectancy, they need to ask pertinent questions.
Conclusion
Life insurance, depending on the issuers, can include mortgage coverage – as well as protecting the interest of children with special needs. LIMRA reports that less than 50% of Americans have no life insurance at all. As we’ve just seen the reasons why, I want you to consider whether or not you think these reasons are right for you.
Author: Himanshu Agarwal
