Many families put off buying life insurance for a variety of reasons. The reasons that come up are usually the same.
Purchasing life insurance may not seem like a high priority at the moment, but life (and death) can happen unexpectedly.
When you choose to put off getting life insurance. Your family members and loved ones are the ones who are really being put at risk.
Let’s go through the Top 8 Reasons People Put Off Buying Life Insurance. Helping to put some of the worry to rest in the process.
- People Don’t Fully Understand Why Life Insurance Is Important
- I’m Healthy, I’m Not Going To Die Soon So I Don’t Need It
- It’s Too Expensive
- “But I Have A Pre-Existing Condition”
- Life Insurance Is Not A Priority
- I Get Life Insurance Through My Job
- Is Life Insurance Only For Old People?
- “I Don’t Want To Go Through A Medical”
1: People Don’t Fully Understand Why Life Insurance is Important
This is the most common reason. It has nothing to do with cost, health or family situation. A majority of people who don’t have life insurance just don’t understand the benefits.
Up to nearly 40% of the people asked “Do you understand the importance of life insurance?” responded with “I’m not sure how much or what type to buy” as their reason for not purchasing.
So let’s try and help immediately, here is the run down and what you need to know.
- Life Insurance is protection from financial loss.
If you have a mortgage, a car on hire purchase/PCP, are paying for childcare and saving for your family’s future, this is the most important reason for life insurance.
What would your family situation look like if you or your husband/wife passed?
Would they be able to pay for everything on their own?
Even if you are not the main provider for your family’s income, if you pass away, who will take care of your kids when your spouse has to work?
Both roles are important to the family being secure.
If money is already a little tight, it is important to know how severe the loss of your income would be to your family.
- Useful to pay off debts.
That mortgage isn’t going anywhere.
It is nice to know that, regardless of what happens to you, you won’t be leaving those types of big burdens on your family.
- Pay Off Estate Taxes
Many families that are financially secure need to keep this in the back of their mind.
Life Insurance can be an excellent way to help paying off the taxes on your estate.
- Final Expenses
This is something that people often don’t want to think about, but funeral expenses are costly.
Whether it is the funeral or other associated costs, many families do not have the ability to come up with that money out of pocket.
There are dozens of additional reasons why life insurance is important to have, and not something to put off.
But let’s continue to understand why some people continue to do so.
2: I’m Healthy, I’m Not Going To Die Soon So I Don’t Need It
Knock on Wood, spin round three times or salute two magpies.
No. but seriously, this is a very unwise way to look at life insurance.
It’s a common misconception that if you are young and healthy, you do not need life insurance.
No one can predict the future. Being in good health does not make you immune to life’s many accidents and tragedies.
Funny thing is, if you’re under 40 and have no medical issues, this is the best time to sign up for a life insurance policy.
By buying now, you’ll have a lower monthly rate and get access to more life insurance plan options.
This is why we always urge people to apply for a life insurance policy as young as possible, and help to reduce the potential monthly expenses.
If something drastic changes in your health, or you suffer an injury, you will be glad that you protected your family by having your insurance policy when you were young and healthy.
3: It’s Too Expensive
I would say that even if Life Insurance WERE too expensive, it would still be much more costly to NOT have life insurance.
Many families still live month to month, and have bills like the mortgage to worry about paying, not a life insurance premium.
While it’s not always easy to find “extra” money, it’s still very important to find a way.
If you think it’s hard living month to month now while also raising a young family, imagine taking away half your family’s income.
It is a safety net that every family needs, to know that if the worst happens to you or your spouse, your family would not be financially ruined.
This is a good reason EVEN IF life insurance was expensive, but that is just not the case.
Life Insurance is incredibly affordable giving the benefits and peace of mind that come with owning a policy.
Young, healthy people who get the best life insurance policy at a lower cost, often end up paying premiums that are so little, they aren’t even noticeable.
This often tiny premium, is a small price to pay for your family’s financial protection.
4: “But I Have A Pre-Existing Condition”
While life insurance may come with low premiums for healthy individuals, what about the not-so-healthy people?
Another big reason people don’t purchase life insurance is the fear of extremely high premiums due to pre-existing health conditions.
Yes, having a pre-existing condition can alter your life insurance policy and you’ll probably pay a higher rate.
However, the price of your policy will also be determined by how you treat your condition.
If you’ve been diagnosed with a disorder or a disease, a proper lifestyle and preventative healthy habits can help to lower your monthly payment.
Additionally, if your health is deteriorating, you don’t want to put your family in any more jeopardy. Purchasing life insurance should become an even higher priority.
5: It’s Just Not A Priority
Even though you understand the benefits and think it’s a good idea, you just aren’t concerned enough to actually purchase a policy.
Many people think that they will own life insurance at some point, but other things take precedent when it comes to spending their money.
Things like new cars, long overdue holidays, or buying a new house, is seemingly a better use of that money at this time.
That same research showed that 60% of Millennials consider their mobile phone, Internet, and digital subscriptions are a higher priority than purchasing life insurance, with 49% of those 65 and older saying the same thing.
Buying Life Insurance might not be the number 1 priority for you right now, but I’m sure that keeping your family financially protected, is.
6: Is Life Insurance Through My Job Enough?
It’s a semi-typical practice of businesses to offer life insurance to their employees as part of their benefit package.
There are 2 reasons why the life insurance offered through your work is not enough. 99% of the time, these life insurance policies are Group Policies and if you lose your job, or move onto another job, your insurance does not carry over.
If you own your own policy outside of your work policy, then you never have to worry about losing coverage just because you change jobs or companies.
The other reason that this isn’t enough, is that the Death Benefit amount of your life insurance policy through work is limited.
While there’s no industry-wide accepted amount of death benefit needed, a safe starting point is to try to have 15-20 times yearly salary in death benefit.
Most policies through work only have Death Benefit pay-outs of 3-5 times salary.
This leaves you quite under insured.
It is vital that you think of your life insurance through work as a “bonus” and not assume that it’s enough to keep your family financially secure.
7: Is Life Insurance Only For Old People?
Short answer, no.
While it may be more useful for the silver generations that are at a higher risk of needing the life insurance policy, age isn’t a factor when considering the need for life insurance.
The reasons someone would need life insurance are to:
- Protect your family’s financial future
- Pay off debts
- Fund estate taxes
- Final Expenses
None of these reasons have to do with age.
If anything, life insurance may be LESS useful for older people, because they often no longer have children that need to be financially taken care of.
A married couple in their 30’s with a new-born have a much higher need for life insurance.
What is the best age to get life insurance?
Now that we see life insurance isn’t only for old people, let’s see what the ideal age to purchase life insurance actually is.
Studies show that anytime under age 35 is ideal.
However, most individuals under age 25 are more concerned with paying current bills than acquiring additional ones.
While the optimal age to purchase life insurance is under 35, millennials are the least likely to purchase a policy.
8: “I Don’t Want To Go Through A Medical Exam”
The medical exam used in applying for life insurance is just like a routine physical.
It usually involves a blood and a urine sample and monitoring things like you’re your heart rate, weight, and height.
There’s nothing scary about it. Plus, if there are any issues with your health, you’ll want to know sooner rather than later.
Even though a medical exam for life insurance is a simple process, there are alternatives like the over 50s insurance which does not require a medical exam.
To do this you just need to apply for an over 50s life insurance policy.
This isn’t the ideal solution for people in good health. Because without a medical exam, an insurance will usually mitigate the risk by charging a higher premium in exchange for the additional risk of no medical history.
Alternatively, an over 50s life insurance policy is a good option for people who may be worried that their health could cause them to pay extremely high premiums on their life insurance policy. Buying life insurance does not need to stressful. Our advisors can help to identify individual requirements as they search the entire life insurance market.