life insurance

Three Common Reasons Why People Don’t Get More Insurance – and How to Overcome Them

In an unpredictable world where many people are finding it more difficult to find financial stability, you’ll often hear older generations wonder why the young aren’t taking the value of insurance more seriously. It’s understandable that additional expenditure isn’t welcome, but here are the best counter-arguments to overcome common objections or resistance to setting aside a portion of household income to insure one’s future.

Prioritizing short-term issues

You probably know a lot of people who feel like they are encountering significantly greater financial challenges in the modern era compared to those of previous generations. Those who grew up in the shadow of recent financial crises may be struggling to get out of student debt, while everyone has to face an average increase in the cost of living no matter where they live.

When you’re faced with a lot of well-defined, significant short-term challenges, it’s easy to make them your priority. The various forms of insurance, however, tend to deal with unpredictable events that our minds don’t flesh out so easily. For instance, we all know that climate change is a worldwide problem, but don’t immediately link it with increased risk of weather-related injury or damage. Yet worsening weather patterns are reported in Denver and other parts of Colorado, leading to bigger hailstones and the need for automotive hail damage repair – which would be covered by auto insurance, if the owner made room in their priorities for long-term risk management.

Gambling on the odds

thinking of buying insurance

Many young people can feel like they are invincible, in a way. And there are statistics which seem to back up this idea; the latest data available from the CDC cites the average life expectancy across the US to be 78.6 years. More than 96% of individuals are expected to reach the age of 40, and over 93% are estimated to survive up to their 50th year.

Given such odds, taking your chances might seem sensible. But this is the kind of assumption which leaves people at the mercy of ‘Black Swans’; a term coined by the author Nassim Nicholas Taleb to describe events that may be impossible to predict, have potentially disastrous consequences, and seem obvious in hindsight. Businesses routinely put this idea into practice by insuring their assets and creating policies for risk management; likewise, insurance is the most accessible means for any individual to mitigate the impact of Black Swan events in their lives.

Over-estimating the costs

Not everyone is blind to the potential risks we may encounter in life, and the need for insurance to cover such circumstances. A recent study shows that almost a third of Americans feel the need for more life insurance; yet nearly 4 in 5 people surveyed were off the mark in their estimate of the cost requirements. Understanding the cost involved will allow anybody to exercise sound judgment and make better budgeting decisions. For example, if you felt that insurance costs were 2-3 times greater than the actual rate (a common error among millennials), you might think that paying for insurance would lead to major lifestyle compromises or simply not fit your monthly budget; learning the actual rates, you could make the necessary adjustments – cutting down on impulse shopping or other indulgences – and still find plenty of financial wiggle room.

Exposure to risk takes place everywhere and every day in life. Getting insurance isn’t about being a ‘worrier’ or not enjoying life; it’s simply a practical measure which allows you to continue to live a full life knowing that you have something in place should the unexpected happen.

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