You’ve probably heard that you should buy a life insurance policy to protect you and your family in case of your unexpected death. However, you’re probably wondering if life insurance is something you really need, or if it’s just an unnecessary expense. Many people are opting out of life insurance these days, opting to spend their money on other things. Whether or not you need life insurance is really going to depend on your personal situation. Here’s why people are opting out of buying life insurance, and whether you really need it or not.
Why People Aren’t Buying Life Insurance
In 2016 the same amount of life insurance policies were purchased as in 1965, despite a substantially larger population. People are placing less of a priority on life insurance. There are many reasons why people are opting out of buying life insurance these days. While everyone has their own unique situation, here are some of the reasons why people are choosing not to buy life insurance.
It feels like an unnecessary expense.
For many people, the idea of adding another bill to their monthly budget that isn’t going to benefit them in the short term just isn’t feasible. Even though life insurance plans at the lower end of the market aren’t particularly expensive, it’s just now always realistic to add another bill to the mix if you are already living with a tight budget. Millennials in particular are feeling the financial pressure, with rising costs of living in large cities and huge amounts of student debt.
An increasing number of people don’t have any financial dependents.
In the past, the structure of most people’s nuclear families looked the same. The husband worked outside the home, and the wife and kids were financially dependent on him. However, things have changed drastically, and that’s no longer the case for most families. Many people are opting to stay single, or to get married and not have kids. Most women now have careers of their own and make their own money, so they are no longer dependent on their spouses for income. In this case, taking out a life insurance policy can feel pointless, because there isn’t any real need for the extra money.
People are choosing to save money for their dependents.
Another common reason that people choose not to buy life insurance is because they already have money and other assets saved up to leave to their dependents. When this happens, taking out a life insurance policy can seem redundant. If you already have money put away that your family can access, then you don’t need to add the extra expense of a life insurance policy.
Many people find the process of buying life insurance overwhelming or morbid.
In many cases, the reason people choose not to buy life insurance is more emotional than practical. Many people are opting out of buying life insurance because they don’t want to think about their death, and they find it easier to just think about other things and avoid the topic. Another reason that many people don’t buy life insurance is because they don’t know very much about it, and they don’t want to have to go through the process of figuring it out. Some people don’t trust insurance companies and don’t want to give them their money every month. Everyone has their own reasoning for deciding to take out life insurance or not, and it’s up to you whether you feel comfortable spending your money on it. If you question how much life insurance costs, there are many ways to get life insurance quotes before you speak to the insurance company, including this website.
When You Should Buy Life Insurance
There are some people who still need life insurance, and these are people who have financial dependents who would be negatively impacted by their death. For example, if you are a single parent supporting children, or you have a spouse that does not work, then you should take out a life insurance policy to ensure they would have the financial support they need in case something happens. Even if you aren’t in this situation, it may behoove you to take out a small life insurance policy if you can afford it, just in case. Although it’s not necessarily essential, life insurance is always going to be beneficial for your friends and family, just to make sure any one time expenses are covered, like funeral costs.
Benefits of Life Insurance
Here is the summary of reasons you might want to consider purchasing life insurance:
- Provide for beneficiaries in time of death.
- Have another source of savings with cash value.
- Keep an asset on your personal balance sheet.
- Fund a charity or foundation when you pass away. Leave a legacy.
Deciding whether or not to buy life insurance is a decision that is very specific to your personal situation. In the end, you will need to go with your gut and decide what makes the most sense for both your current budget and your future needs. Don’t buy life insurance just because other people have it or are telling you to get it – make a decision based on what’s best for you. If you are wondering whether or not life insurance is right for you, it may be helpful to talk to an insurance agent or a financial planner to learn more about it.
