As we lead our lives, we buy insurance for our health, our car, the contents of our apartments, or to protect the investment we have in our homes. We do so because in most cases, having the coverage is mandatory. The bank, landlord, or other lender requires that we have the insurance as a condition of getting the loan or obtaining a lease. In contrast, buying life insurance coverage is a voluntary act. It is something you must decide to do based on your individual needs and the amount of financial assets you have that can be used to pay for unexpected events. No one is going to force you to buy it. Let’s look more at what you should consider in making this potential purchase.
A headline on Apple News from April 21, 2019, helps to answer the “Why buy?” question. According to a survey by the financial services firm Edward Jones and the nonprofit consumer-education organization Life Happens, 81 percent of Americans believe their family is their most valuable asset, but less than half (41 percent) are protecting their family with an individual life insurance policy. In fact, according to the Protecting What Matters Most Study published by these organizations, roughly one third of Americans (32 percent) indicated that life insurance is a low priority—or is not a priority at all—when starting a family.
Americans as a whole don’t bother to buy life insurance because they don’t view the purchase to be a priority. The reason to make it a priority is to acquire needed risk protection for an affordable price. Remember, you buy life insurance to be able to receive cash in the future should you die or, in certain situations, become disabled or chronically ill.
Here are the common questions, observations, and objections that consumers raise when considering the purchase of life insurance:
Why should I buy life insurance? It is expensive and a bad deal.
Why should I have life insurance? Dying is the least of my worries.
I am single and don’t have kids—why should I have any coverage?
I have other, more pressing financial needs in my life.
If something unexpected happens, I’ll get money from my family and friends to pay the bills.
It is a product my parents had but I don’t need.
It is too difficult to buy. I don’t want to give a blood sample or take a physical examination.
It is a bad deal. The life insurance companies profit, but consumers don’t.
I have a chronic illness. No company will insure me.
I am in my forties and not married. I have no dependents. I don’t need it.
I have coverage at work that is enough to protect me. I don’t need my own coverage.
Life insurance is an old-school financial product. I have many financial needs, and protecting against dying too soon is the least of my worries.
Many people ask one or more of these questions or voice the concerns noted above. Several individuals procrastinate and avoid seriously considering the purchase of life insurance until a key event takes place in their lives. These include events such as getting married, having a baby, reaching an age milestone (e.g., turning forty), being diagnosed with a serious illness, or experiencing the unexpected death of a close friend or family member.
I believe that today’s innovative life insurance products are different. Today’s options are designed to deliver money in the future when it is needed most for a variety of reasons. From a cost standpoint, premium rates are at near record lows. Today’s products also make available what are called “living benefits” that can help protect you against a number of key financial risks while you are alive—instead of only covering the risk of dying prematurely.
In the FinancialVerse, certain financial risks are real and need to be addressed to reduce financial anxiety and stress. Having the proper protection in place for yourself and your dependents creates peace of mind. You should understand the financial and psychological benefits and values, along with the costs and limitations, of life insurance so that you can make the right purchase decision to meet your needs. This includes making a decision that coverage is not needed. The FinancialVerse is risk focused. If there is no risk, no protection is needed.
Today’s life insurance is a protection tool that can be used to reduce financial risks; leave a legacy to your family, friends, or church or charities; or accumulate cash for whatever need you may have in life. If you have these needs, buying life insurance makes sense. If you already have the financial resources to pay for these matters or have no risks to protect against, you may not need the coverage.
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