Life Insurance is perhaps one of “the” biggest foundations of personal finance. It’s also one of the biggest foundations that people often times misunderstand, too.
For most, if not every household, Life Insurance is vital. Yet when mentioned, it often leads to more lack of understanding than anything. Many people are turned off by those two words (Life Insurance), while others may just not understand the reason why it’s so important.
Every surgery that’s out there covering the subject of life insurance shows that most of the public has little to no coverage. That’s scary – considering that our families won’t have enough to live a long time and prosper – right?
We talk about life insurance ALL the time. It was one of the first things we set up when we exited the military. With each child, we re-examine our policy, add our new child and re-evaluate the need for more. So many people we know either haven’t discussed it with their spouse, or don’t have it.
The sheer thought of going day to day without that reassurance is worrisome – don’t you think?
Do you Need Life Insurance?
If ANYONE relies on you financially, you need life insurance.
It’s your responsibility to take care of your family – I would even go on to say, if someone relies ON you, you need life insurance. And we say this because many Stay at Home Moms assume that because they may not contribute financially, that they don’t need it. They need it JUST as much as their spouse who may be bringing in a full time income.
And the reason they NEED it is because they stay at home to care for the children. If their life is taken from them, those children need to be cared for – and it’s not a wise choice to assume that family members are going to pick up that responsibility…. nor can the working parent quit their job (after all, that’s their main income source.)
So here’s the question ~ if it’s that important, then why don’t most people have it? How did life insurance become something that’s so gravely unpopular and since when did people become so reluctant to talk about it?
#1 – Lack of Education
When it comes to life insurance, people are poorly educated. Sure, some of us may know that life insurance is truly the foundation of a financial portfolio – but does it sway you to get a policy? In most cases, no. We know we are going to die – so it only makes sense to get a policy – after all, we aren’t going to be “guaranteed” any other claim through any other form of insurance.
Many financial planners have a shortened view of life insurance, and therefore may not realize the importance for people to have it.
#2 – Bad Experience
Let’s be honest: people avoid insurance salesmen. I know this because as a child, we had a guy hat sold insurance in our town and my dad used to literally hide when he came around. Other people may have potentially had a bad experience with life insurance.. maybe they applied and were rejected, or… thought that the rates were they were quoted were much too high.
In any case, they don’t have coverage – that in itself is a scary thing. Most people are insurable, and the price at which they can be insured is relatively affordable. The problem is, they had a bad experience and may not want to try the process again.
Perspective isn’t There
In the big scheme of things going on, who wants to talk about dying or death? Not too many. People are busy – with all things unrelated. Black Friday sales are approaching… then it’ll be Christmas. Shortly after Christmas Valentine’s Day will roll around, then Easter and before you know it, the end of the school year. The kids will be home for the summer and then we’ll start planning for those back to school sales.
Nobody wants to talk about their own death – and because most of us are in great health (or, somewhat great health), the concept of losing our lives isn’t as real to us.
The truth is, we all die – and that’s not necessarily a bad thing. Preparing for that time earlier versus later is one of the best things you can do. If you have kids, then it’s something that you have even more of a reason to plan for. Start a meaningful conversation with your spouse about that – I know it’s something we talk about often.
Not because we think we are going to die, but because we want to make sure we are taking care of each other AND our children as best as we can so that when that day comes, they have one less thing to worry about.
Life insurance isn’t just for the breadwinner – it’s also something to consider for your spouse (who may stay home) and your children (in the form of a rider) – I have so many friends that pay insurance on their car(s), but when it comes to their life, they haven’t made it a priority.
Is your car really more important than your life? The lives of your children? Your financial well being?
Deep down I think that confusion is simply a lack of understanding, perhaps just the idea of talking about that entire subject is not appealing to most. .. and eventually you run into a problem where you wish you would have thought about it before something happened.