In my experience selling this product for over 25 years, I have come across many people who understand the need for life insurance but haven’t done anything about it. Based on their reasons, here are three obstacles keeping people from purchasing life insurance and practical ways to overcome them.
1. You Don’t Want To Think About Dying Soon
Many consumers believe they are in competition with their life insurance company. Their thought process goes like this: you give these companies your hard-earned money year after year, but you (meaning your family or business) don’t “get” anything unless you die. And the sooner you die, the bigger the return on your payments. Companies “win” if it takes longer for you to die because they get more of your money in the meantime. If you die sooner, you “win” because they get less. Who wants to take such a morbid bet?
In truth, it’s not a zero-sum game. It's not an either/or proposition between you winning or them winning. A life insurance company is an ally, not an adversary. Once you change your perspective of the relationship, you realize that you have taken them on as a risk-sharing partner. No no can predict when you are going to die, so if you can’t afford to self-insure against your family or business losing you tomorrow, you need to bring in a partner to assume the risk.
2. You Treat Life Insurance As An Investment
I've heard many people say, “I think I'll postpone this purchase until next year. I'll only be one year older, so the premium shouldn't be that much higher.” It's like they're saying, “I'll invest in this product next year. I'll have lost only one year of earnings.” This idea assumes that they will be as insurable next year as they are this year.
My experience has been that this is not a safe assumption at all. Think of all the factors that are considered in life insurance underwriting: current health, medical history, family medical history, vocation, hobbies, lifestyle, financial/legal/motor vehicle record. Something could happen in any one of these areas that could increase the premium price dramatically or even make you ineligible for coverage. Once you realize that you cannot take your insurability for granted, then you know that the time to buy is now.
3. You’ve Had A Bad Experience With A Life Insurance Application
Sadly, buying life insurance can be a miserable experience for many people. They may find the underwriting questions intrusive, and the whole process can be exhausting. All too often, they get approved at a rate higher than quoted or not approved at all. Thus, they give up.
All of this is understandable but unfortunate. Believe it or not, though, the experience of buying life insurance can be satisfying. The key is prequalification. Every consumer has a right to be confident of the rate they will be charged prior to submitting an application. It does take some effort from a broker to get a client pre-underwritten and deliver a premium commitment from a carrier, and most brokers and agents do not set up their business this way. But if you find one that offers this service, and I have been doing this for decades, then you can get approved at the rate quoted. Your purchase of life insurance can be managed with the integrity you expect when buying every other product.
Life insurance is critical and will provide tremendous peace of mind for you and your family. Don’t let obstacles or misconceptions hold you back from purchasing a life insurance policy and taking care of your loved ones. Have you experienced these hindrances or others I have not mentioned? I’d love to hear your thoughts.