Over half of the United States of America (53%) go about their day without life insurance. Some of these uninsured or underinsured people are married, have children, and partake in riskier jobs or hobbies, leaving them vulnerable in the event of the unthinkable.
PHP Agency is a financial services company dedicated to improving the culture of the insurance industry and increasing access to premium insurance products. Below, PHP Agency reviews common reasons that Americans are failing to secure their financial future by not purchasing life insurance.
Financial planning is an essential yet challenging part of everybody’s life. However, households aren’t accustomed to including life insurance within their diversified plan. They are neglecting — through no fault of their own — to see that it’s a key element of a comprehensive, secure monetary future for their family.
A Look Into America’s Demographics and Relationship with Life Insurance
Individuals’ attitudes toward life insurance aren’t the same across the board. Certain circumstances and demographics tend to lean more toward or against investing in their loved ones’ futures.
Coronavirus and Life Insurance
The COVID-19 pandemic taught the world many things, one of the most important lessons being that anything can happen. But sadly, not many families planned for unexpected, premature deaths.
In fact, 42% of Americans admitted that their household would financially struggle within just six months should a primary earner pass away. That’s a shocking statistic.
Despite all the sadness and trepidation deriving from such unprecedented times, PHP Agency has given a few select groups food for thought on their original ideas of “life insurance isn’t worth it.”
The likelihood of more people investing in life insurance following the pandemic is most prominent in these groups:
- American men (33%)
- Millennials (45%)
- Black Americans (38%)
- High earners (42%)
American Women and Life Insurance
Statistics show that women are less likely to invest in life insurance policies than their male counterparts. A mere 47% of females have life insurance, whereas 58% of men own coverage.
In 2020, over 18 million women lose their life insurance coverage. That’s roughly 14%.
Why Don’t People Invest in Life Insurance?
So, why aren’t more people investing in the worthy policy? Well, there are three main reasons: money, priorities, and knowledge.
“It’s Too Expensive”
Money is the top reason behind people refusing to invest in life insurance coverage. There’s a huge misconception that it’s far too expensive — over 50% of the country’s population massively overestimates their life insurance cost.
But the truth is quite the opposite according to PHP Agency reviews.
Life insurance is made with the public in mind. So, a plan for every budget and lifestyle does exist; it’s just a case of knowing where to look.
It’s Not as Important as Other Obligations
People have busy lives. Utilities, rent or mortgages, water, food, and everything else pile up, often amounting to a hefty sum of monthly outgoings. Because of that, households talk themselves out of adding more to that heap and avoid investing in life insurance.
However, regarding life insurance as “less-than” other financial responsibilities may not be helpful for the nation in the long run.
Funerals are expensive. Burials are expensive. Passing on generational wealth can be a hassle. Families struggle to pay their bills following the death of a wage-earner. A simple life insurance policy can be the key to unlocking a less headache-inducing experience surrounding unexpected departures.
It’s Too Confusing
PHP Agency reports that a staggering 69% of Americans confess that they are not knowledgeable about life insurance. And 53% state they haven’t bought coverage because they don’t know how much to purchase.
Additionally, 30% of consumers think that life insurance is purely for final and burial expenses. This way of thinking often results in families not purchasing enough coverage, rendering income replacement impossible.
From the terms to the fees to the cover to the type, there isn’t enough education surrounding life insurance to support people attempting to navigate the applications.
Should More People Invest in Life Insurance?
Despite the common misconceptions behind not purchasing life insurance policies, according to PHP Agency reviews, it’s still something that more people should be investing in for the following reasons:
Securing Spouses’ and Children’s Futures
If there are others that rely on the wage-earner, they need life insurance. Having children is a popular motivator to secure coverage but doesn’t light the fire in everyone. The insurer pays out upon death to cover mortgages, education, and other household expenses.
According to PHP Agency, working in a high-risk job increases not only the likelihood of death but also disability. Construction, mining, aviation, firefighting, and the oil industry correlate with a larger chance of death and, thus, even more need for life insurance.
The Bottom Line
The confusion and expensive stereotypes surrounding life insurance are the main culprits swaying Americans’ life insurance purchasing habits — or lack thereof.
It appears that with more education, knowledge on the actual costs, and rearranging financial priorities, this can change. Hopefully, the future for Americans is a bright one, lightened by people finally recognizing the necessity for life insurance.