Most common reasons why people don't get life insurance - DO YOU RECOGNISE YOURSELF ?

One of my previous post was about the most common financial mistakes people do. One point was about people that disregard life insurance & critical illness cover. Today, I will expand on this topic because, in general, the probability of death is pretty simple to calculate. It’s 100 percent. We all going to die! We all wish to know how though. As humans we fear unpredictable events such as catastrophes, disasters and accidents and additionally, we tend to worry about horrifying events like gunfire or terrorist attack.

On a yearly basis, the U.S centers for Disease Control and Prevention publishes a compendium of how many Americans died the past year. However, data shows that science is evolving and therefore Humans are living longer, which is a good thing.

The CDC data shows that at the age of 85, an American will have 92 percent chance to make it to the next year.

If you look in depth into the CDC data from 2009 to 2014, you will find the following results ( Simulation run over 10,000 man): 

9,831 Total dead; 9,087 Diseases; 533 Accidents; 211 Suicide/Homicide and 169 Survived to 100. The breakdown is as follow:

Childhood death (0-12): 18 deaths (0.18%)

Adolescence death (13-20): 33 deaths (0.33%) with the main cause resulting from motor vehicle accidents (10)

Young adulthood (21-35): 205 deaths (2.05%) with the main cause resulting from accidental poisoning by and exposure to drugs and other biological substances (53)

Middle age (36-55): 678 deaths (6.78%) with the main cause resulting from heart diseases/stroke (165) and followed by cancer (145).

Retirement (56-70): 1,634 deaths (16.34%) with the main cause resulting from Cancer (566) followed closely by Heart diseases/stroke (460).

Old age (71-84): 3,322 deaths (33.22%) with the main cause resulting from Hearth diseases/stroke (1,037) and Cancer (979) 

Methuselah (85-100): 3,253 deaths (32.53%) with the main cause resulting from Hearth diseases/stroke (1,354)

Theses statistics show that we are probably more likely to die from a critical illness past age 35. In fact, 1 out of 2 men will be diagnosed with a critical illness in their lifetime. As a matter of fact, 64% of UAE residents do not have a life insurance and 85% of UAE residents do not have a Critical illness cover, whilst we are all going to die at some point and are more likely to be diagnosed with a critical illness. And the same people, insure their car even though it is not sure they will have an accident, or people insure their house against robbery or fire. 
If you have a car accident, what will be the first thing that people will ask you ? Is your car okay? Can you still use it ? Well, I believe they will most certainly ask you if you are safe and okay rather than asking for the state of the car first. Nonetheless, people don't see the point of a life insurance or any kind of insurances that will protect them against an unexpected event. 
But why people behave this way? I will list the most common objections or obvious reasons why people do not see the necessity of such products:

#1 Procrastination

People will procrastinate applying to a life insurance/critical illness policy because they don't feel the need now, or it is not their priority. However, it is not your wallet that buy your life insurance, it is your health. The healthier you are the cheaper it will be. And postponing it will increase its price, as a matter of fact every birthday celebration will have an increase in the premium. Additionally, when applying for a life insurance they will ask if any of your parents or any relatives have serious illness that may be a risk for the insurance company to have you as a client. Therefore, the sooner the better. 

#2 It is not a legal requirement

In most countries, having your car insured is mandatory, otherwise you can't drive. This is why people have car insurance, otherwise a lot of them will not have one. 
However, there is no legal requirement to maintain life insurance, therefore people think that they are stronger than others and will not need one. Remember the sayings, it will never happen to me, until it does!

#3 No Current benefit - it's invisible and intangible

People are reluctant of joining a plan that provides no immediate benefit. When you buy electronics, car, holiday trips or anything else tangible there is a sense of excitement after the purchase. You get to drive the car, to play with your electronics or go on holidays. With insurance, you get an insurance policy, that's it. And life insurance actually will never provide an immediate benefit, it will provide a benefit to your beneficiaries after your death. A critical illness protection will provide you a financial benefit upon diagnosis of a critical illness.

#4 Fear of death - unpleasantness

Most people don't like talking about death or critical illness. They have this intense fear that if they talk about it or if they sign up for a product related to it, they might jinx their own life!
At the end of the day, we are all going to die, and life insurance is planning for it and support your family/dependents in an unexpected event.

#5 Disbelief in their own death

"I am too healthy to die"

"I have too much to live for"

"I have too much to do before I die"

"I am too young to die"

"I am too busy to die"

There is not much to say on this topics aside from the obvious that we are all going to die, and even if most of us may think the same as the above, sometimes life has other plans for us. Therefore, we all need a life insurance. 

#6 Cost: It's too expansive!

I believe this one is the most common reason that refrain people from having a life insurance. 80% of people overestimate how much a monthly premium would cost them. 

For a male aged 35 and non-smoker, for a 35 years policy (until age 70) and a cover amount of half a million dollars, the monthly premium would be $106 ($3.5/day) with one of the best insurance providers. It is even cheaper that your daily Starbucks latte !

However, on a positive note, the only good reason not to buy a life insurance is for those that don't need it, those without dependents or liabilities. This most likely apply to people in younger age, not married, no kids and no mortgages. Nonetheless, buying a policy in your life at an early stage will provide you with better deals and potentially guarantee your insurability.

Don't fit in either of those groups? then what's your excuse?

All I can do is to give you the information and education, the rest is entirely up to you. But if you have dependents, you should think about it actively. Life insurance may not be seen as a necessity while we are alive, but it will absolutely be one when were gone. Clearly not to us, but to our dependents and survivors. Life insurance is our last, best chance to take care of our loved ones.

That fact alone makes it a necessity.

Contact me today ([email protected]) to have a free quotation and see how much it would cost to protect yourself. Stop procrastinating and gets things done.

Additionally, leave your comments below if you think I forgot any points and feedback is always much appreciated. 

Thanks for reading