Why Do People Gamble In Life Without Life Insurance?
Posted August 7, 2009 – 10:21 am in: structured settlements FAQ41% of U.S. adults do not have life insurance coverage. (National Underwriter)
Tags: Gamble, Insurance, Life, People, Without-
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Most people are pretty sure they aren’t going to die THIS year. And probably not next year. A few don’t have any dependents or real need. And a small handful flat out don’t care about the people they leave behind.
But let’s face it – life insurance is a FINANCIAL tool. And alot more than 59% of Americans have very little money knowlege – they are rotten financial planners, live paycheck to paycheck, spend more than they make, take on massive debts with unrealistic expectations of paybacks, or worse, without even THINKING about how to pay it back.
Life insurance isn’t where I would START people’s education about money and money tools. Debt is. Just my opinion.
There are probably as many reasons as there are people without life insurance.
For those who need life insurance, it truly is a gamble going without it.
Some reasons may inlcude:
1. They don’t have time to research and buy life insurance.
2. They think it will cost too much.
3. People procrastinate.
4. It isn’t perceived as an immediate need.
5. People don’t understand life insurance and how it works.
6. They don’t trust life insurance agents.
7. Som epeople just don;t believe they are getting the best deal when they get their quotes for life insurance.
8. People don;t want a high-pressure sales pitch from an insurance agent.
9. They think they will live forever, or at least until they finally decide to actually buy life insurance.
10. Some people just think life insurance and life insurance companies are a scam.
These are just a few of the reasons some people gamble in life without life insurance.
Well I can’t speak for “most”, but I can speak for me.
My husband and I are trying desperately to save our small manufacturing company. Between our modest home (a fixer upper actually), our personal debt, our business debt and the reality that our company’s building has lost nearly 40% of value since we bought it (and still are paying on it), we are around $1.5 million in debt (I refuse to actually sit down and see the exact number tooooo scary). As we are both in our 40s, we cannot afford enough insurance to cover what would need to be paid.
So, we are better off with using the insurance premiums to pay down debt because the reality is if my husband dies, I will have to file bankruptcy no matter how much insurance he has. If I die, he will be fine (most of the bills are in his name).
So, it comes down to money. We can’t afford it, so why waste the money when it does better going elsewhere.
Not everyone needs life insurance. Single people don’t need life insurance. Retired people don’t need life insurance. If married and both work and there are no large debts, then that couple would not need life insurance.
These are just examples. Perhaps there are some people without life insurance that should have it, but it is also likely that some of the 41% you site don’t need life insurance.
There are several reasons for it. 1. Many people don’t realize the importance of it. Our schools don’t teach personal finance even though it is one of the most important things to know in life. As a result, many people don’t take basic steps to secure their futures. 2. Some people can’t afford it. If you have a low income or are unemployed, food and rent are far more important than life insurance. 3. Not everyone needs it. For example, I am single with no dependents and no debt. It would be silly for me to buy life insurance because there is no benefit.
I am a life insurance broker that is just amazed at how many families have no protection. The biggest issue is people are uneducated about finances and life insurance. But here is one to think on for all you uninsured families, Here is the typical scenario, mom is stay at home mom, dad makes 100000 a year, 3 kids under the age of 18, very little savings, big mortgage payment, Dad dies in car accident with no life insurance in force and mom has no financial means to support her children. She loses the house, car and goes into bankruptcy. People need 10 times their annual income in coverage. Stay at home moms need coverage as well, even tho they do not earn income they take care of the home kids, everything, Dad would have to pay soemone to do all that if she dies. Hope anyone that is uninsured is rethinking their decision. Some coverage is better than none at all. Oh and dont forget the burial and fuenral expenses that they want paid for right away.
Most people don’t realize the importance of it and think they can always “get it later.” Also, many people incorrectly think that the primary purpose of life insurance is as an investment for them, which it it not. It is protection for your survivors.
probably because they are stupid!!