For various reasons, many people put off or don't want to buy life insurance. It's not a required insurance such as car and home insurance. You are not obligated to purchase it any time in your life. With mounting bills every month, paying for life insurance always seems to fall on the back burner. It is just an extra expense for many. However, it really is one of the most important expenses that you will ever pay for in your entire life. You may never use your 20-year term policy, but you will have the peace of mind that your family will be helped financially if you were to die unexpectedly.
Here we list 10 reasons why people don't buy life insurance, and why they are wrong. This is by no means an exhaustive list, but only very common reasons.
1. It's too expensive and I can't afford it.
Here's the interesting thing about this reason: usually life insurance really isn't all that expensive. It does depend on a number of factors, which include your age, height, weight, how healthy or unhealthy you are at that time, whether or not you are a smoker, which type of life insurance, and how much coverage you want to buy. If you are fairly young and healthy and you are not a smoker, you should be able to get a 20-year term, $250,000 level term policy for less than $200 annually. The price of life insurance does increase as you get older. If you are a healthy 50 year old, you shouldn't expect to pay the same as a healthy 30 year old.
2. I'm not sick. I'm strong and healthy.
You are healthy now, but you have no idea of your health status in 5 or 10 years from now. None of us knows for sure how healthy we are going to be tomorrow or the next day, let alone five to ten years from now. Any of us could be blindsided by an unexpected medical crisis that made them eligible for life insurance. If you have a spouse, or children, or parent who relies on your financial support, you should seriously consider some form of life insurance, even if you get regular clean bills of health from your physician.
3. I have life insurance through work.
Many people are offered life insurance as part of their employee benefit package. These policies usually have a small death benefit such as $50,000 or 1-2 times your annual salary. It isn't as much money as you think. It sounds like a lot of money, until you realize it has to cover some or all of the expenses for your loved ones in your absence. Plus, if you leave that job, life insurance usually doesn't move on with you.
4. I don't have children.
Kids are a big reason that people buy life insurance, but they aren't the only reason. You may have other people in your life who would suffer financially from your loss, such as a live-in partner, a siblings, or your parents. You could even donate the money to your favorite charity.
5. I have many assets to leave to my loved ones.
You might have a lot of assets, but what form are those assets right now? Are they mainly liquid, meaning that your beneficiaries can quickly convert it to cash should the need arise? Or are they mostly in non-liquid form such as cars and jewelry? A life insurance policy could provide your loved ones with some immediate cash. This would allow them to pay off any debts that need immediate attention.
6. I've got too many other things to worry about right now.
Maybe you are preparing for a wedding, buying a home, or having a baby. You don't have time to think about life insurance. These situations have forced people to put "buy life insurance" at the bottom of their to-do lists. But you never know when something unfortunate or unexpected can happen to you. If there are people in your family you depend on your income, you should put life insurance at the top of your list.
7. I don't understand it enough to buy it.
Some life insurance policies can be very complex, such as whole life and universal life. However, the majority of people only need to purchase term life, which is a fairly simple policy to understand. Speak with an experienced agent today life us about your options.
8. I have other financial obligations that are more important than life insurance.
Other financial obligations such as auto insurance, home insurance, food, entertainment, and daycare generally take precedence over life insurance. Some people love spending their hard-earned cash on vacations, shopping, or eating out before spending it on life insurance. For others, cable, internet and phone bills come before life insurance. Many people realize they need life insurance, but it is not a priority for them. Budgeting could be helpful so that you can afford a life insurance policy. If you spend a little bit less on eating out, you could possibly use that money each month to fund a life insurance policy.
9. I most likely will not qualify for life insurance.
If you are generally healthy overall, you can easily qualify for life insurance. The problem comes when you have a serious condition, such as asthma, cancer, diabetes, or heart disease. You may or may not be outright declined. Shop around. You need to find the right insurance company to apply that will give you the best rates.
10. It's morbid and makes me think about death.
Yes, life insurance is about death. In order for your beneficiaries to be paid the death benefit, you will have to pass away. This forces you to think about your own mortality. There is no easy way to combat this issue. However, think about the thought of leaving your spouse, children, or other loved ones in bad financial shape if you pass away. That isn't very appealing at all.
Written by Pepe Insurance Agency
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Dutchess County NY residents, at Pepe Insurance Agency, we work with you to make sure you have the coverage you need, while delivering it at the best price. Give us a call at (845) 724-3031 or fill out our Contact Us form to get in touch with an agent. We want to make sure you meet your insurance goals and protect what is most important to you!