8 Reasons People Don't Buy Life Insurance

There is no doubt that not everyone needs life insurance. According to the Consumer Federation of America (CFA), there is no good reason to buy it if you don't have any of your dependents, "since there is no economic catastrophe associated with death."

There are exceptions, however, with the CFA stating that "those who expect family responsibilities soon may want advance coverage to protect against health changes that can lead to increased costs. Long-term life insurance is affordable for young people. non-smokers so pay for what you don't need yet, but it will happen soon, not a serious burden. "

However, it can at least be shown that if you are single, and especially if you are single, as well as young and relatively healthy, you may not feel the urgent need to buy life insurance as soon as possible.

The same cannot be said for many of the excuses that people who spend buying this type of insurance use when asked to explain their indecision or indifference. In fact, most of the reasons cited by people not seeing a resume or life insurance benefit can be easily disproved, the following examples being noteworthy cases.

1. Life insurance costs are prohibitive (or you just can't afford them)

Here's what's funny about this particular logic: life insurance is generally not very expensive.

It depends on a number of factors, of course, including your age when you decided to take a policy, how healthy you were (or not) at the time, whether or not you smoked, what kind of life insurance, and how much coverage you want to buy.

If you're young, fairly healthy, and don't smoke, you should be able to get a 20-year $ 250,000 policy for as little as $ 200 a year.

This is very far from the general knowledge among consumers today. Todd Silverhart, Ph.D., corporate vice president at insurance research firm Limra, shares that the work he and his colleagues have done in the field indicates that "consumers generally don't have a good understanding of how much a life policy costs."

In fact, he adds, "they tend to greatly overestimate the true cost," with a good example of this, when asked (as part of the 2015 Insurance Scale study conducted by LIMRA with the nonprofit Life Happens) to estimate the annual cost of the policy mentioned above. The average person answered $ 400. On the other hand, the average response from people under 25 was $ 600, while one in four assumed the bill would be $ 1,000 or more.

2. I don't need it because I have a lot of goods to leave to my loved ones

That may be true, but what do those assets look like right now? Is it primarily liquid, meaning that recipients can quickly convert it to cash if the need arises? Or is it primarily illiquid, meaning real estate, a stake in a business, or even jewelry?

If the latter, a life insurance policy can give your loved ones access to some "cash." This will allow them to pay off debts that require immediate attention. It would also allow them to keep those illiquid assets instead of selling them for a fraction of what they would receive.

3. I am in good health

You are now, but how about five or ten years later? In fact, none of us know for sure how healthy (or not) we will be tomorrow or the next day, let alone a year or a decade in the future.

It doesn't take much surfing the internet to find stories of people who ignored life insurance because they were young or healthy (or both), only to be shocked with an unexpected medical crisis that left them ineligible for life insurance.

This does not mean that everyone should go out and buy as much life insurance as possible. If you have a spouse, children, or parents who depend on your financial support, you should seriously consider at least some of the forms and the amount of life insurance. Even if you regularly receive clean health bills from your doctor.

4. I have many other things to worry about now

Perhaps you have recently gotten married or have been busy preparing for your walk down the aisle. Or maybe you were about to have a baby, or you just had a baby.

These and other situations have led many people to place "buy life insurance" at the bottom of their to-do lists, assuming they were on these lists to begin with.

But you never know when something unfortunate or unexpected may happen to you. So if there are people in your life who are dependent on your income, you need to make life insurance a priority again ASAP.

5. I don't understand enough to buy it

All kinds of studies have found that one of the main reasons people don't buy life insurance is that they are confused by all the types and options that are given to them during the buying process.

According to LIMRA and Life Happens' 2015 Insurance Scale Study, for example, 38 percent of respondents cited "I'm not sure how much or what type to buy" as a reason not to buy.

"Since buying life insurance is believed to be important and not something that is done very frequently, the uncertainty that surrounds it paralyzes many people," says Silverhart.

A fairly obvious solution to this problem is to get in touch with an experienced agent so they can guide you through the process with a helping hand rather than tackle it yourself.

6. I find the process terrifying

According to a Limra study, more than 70 percent of people who purchased life insurance policies through their employer said they were happy with the process and even described it as "comfortable."

On the other hand, a recent study by the same organization indicated that those who are going to buy life insurance on their own are much less happy with the experience. In fact, many say they find it intimidating.

Again, this is another situation where working with a professional who knows the ins and outs of the industry will help alleviate some of the stress associated with such a complex product.

7. I have other financial obligations that are more important than life insurance

For some people, spending their hard-earned money on vacations, shopping, movies, or eating out is more important than using it to pay for a life insurance policy. For others, cable, internet and phone bills predate life insurance.

In fact, according to the latest study of insurance metrics conducted by LIMRA and Life Happens, 60% of millennials consider their cell phones, internet and cable payments to be higher priorities than buying life insurance, with 49% of those 65 years. And above they say the same.

According to Jim Curley, Limra's membership director, "Today consumers face more financial demands than ever. Younger buyers in particular are realizing that they need life insurance, but it is not a priority for them."

One way to make it a priority for younger and older consumers alike, he adds, is to increase how cheap the cost of life insurance is, especially if you spend a little eating out, watching movies or even having coffee every days. Instead, the savings to fund the insurance policy.

8. I don't trust insurance companies or their agents

This prevents more people than you might think from buying life insurance. The aforementioned study from LIMRA and Life Happens found that nearly 40 percent of respondents did not purchase this due to insurance agents.

If this describes you, there are several places you can go to read any business you are looking for. AM Better, the Better Business Bureau, the National Association of Insurance Commissioners, and your state's Office of the Insurance Commissioner are four great examples.