The other day something occurred to me. In 60 years I will likely be dead. Me, dead! Isn’t that ridiculous?
Whenever I spiral down this uncomfortable train of thought it always reminds me of that Seinfeld episode where the gang is having coffee after a funeral – all worried that they are wasting their lives.
“But what isn’t wasting it? Is this a waste of time right now? Can’t you even have a cup of coffee with people!?” Elaine laments in a panic to George and Jerry.
And that’s the problem with purchasing life insurance. It raises a whole bunch of issues that nobody really wants to think about.
Because if you were dead you would never see your friends or family again, sit on your favorite park bench again or finish season 83 of Dancing with the Stars. These are all terrifying thoughts – and I’m not just talking about Dancing with the Stars having 83 seasons.
But maybe if we take a closer look at the main reasons people procrastinate when it comes to life insurance, we might be able to change the way we think about it.
To help, I’ll also be sprinkling in some words of wisdom I received from life insurance super agent Nad Khoja. Nad has seen it all during his career, so you might find his point of view pretty insightful.
Mental blockers: Why you’re putting off life insurance
A recent survey asked consumers to list the top reasons they procrastinate when it comes to life insurance. Do any of these look familiar to you?
It’s too expensive – 64%1 A lot of people think life insurance is super expensive, but the reality is that most of us are really bad at guessing the cost. When surveyed, the average guess was twice as high as the actual amount1.
Other financial priorities – 59%1 Mortgage, groceries, car payments, bills, vacations. There are so many valid expenses we’d rather put our money towards every month. Heck, I also have a lot of less-than-valid priorities like video games and chicken wings.
You don’t like thinking about death – 34%1 Turns out that the cast of Seinfeld and I aren’t alone! 34% of people said this was a reason they didn’t want to get life insurance. Dying is definitely a scary thought.
Nad’s wisdom: There’s a lot of superstitious people out there. I’ve had many clients who think if they talk to me about life insurance then that means they or their partner will die. So I wouldn’t say it’s unusual, but I think deep down we all know this is a silly reason to put off protecting your family’s home and finances.
Procrastination – 35%1 Part of what makes getting life insurance so difficult is that unlike auto or home insurance, it’s not mandatory. So why would you do today what you can put off until tomorrow? Getting life insurance is nobody’s definition of a fun Thursday night!
Changing your thinking: How to think positively about life insurance
Now that we’ve gone over the mindsets that can lead us to procrastinate, let’s consider some of the motivations that can help us to change the way we think about life insurance.
A caring act. One of the best (and mushiest) rationales I’ve heard for purchasing life insurance is that at its core, it’s a really caring thing to do.
Whenever I listen to parents recap their exhausting weekends, it’s inevitably a laundry list of child-focused activities that they indulge because they want their loved ones to have a safe and enjoyable life.
Getting life insurance is simply an extension of that effort. Think of it as just one more quick chore you need to strike off your to-do list to ensure everyone will be okay (financially at least) if anything happens to you.
Younger can be cheaper. If, like me, you consider yourself to be a rather thrifty individual then something that might help you to stop procrastinating is the knowledge that life insurance is generally cheaper the younger you are when you get it.
Nad’s wisdom: Like I always say, “Money doesn’t buy insurance, health buys insurance.” The money just pays for it. So sign up while you’re young and healthy!
There is no safety net. I think this is a common conscious or subconscious way of thinking for many young people making the transition into adulthood. A belief that if the worst were to happen to you, then surely someone (a bank, the Government, a charity, your parents) would step in to help your family maintain their current standard of life.
But you might find letting go of this false belief to be quite liberating. Because deep down you already know those safety nets don’t exist.
Nad’s wisdom: Many of my new clients are shocked to hear that without life insurance they would likely lose their home if their partner passed away. They tend to think that the bank would just allow them to keep living there even if they couldn’t afford their mortgage. But this just isn’t the reality. That’s why you need to have a plan.
Where else could you find the money? You might assume that to make room for life insurance payments you’ll have to ditch something you really like. Everyone has heard the example of giving up their daily cup of gourmet coffee.
But maybe you love your daily coffee break! So don’t give that up. Get creative about other areas of your budget you could cut. Maybe you never watch that bonus pack of cable channels, or use your home phone line or cook those sausages from that meat-of-the-month club.
Nad’s wisdom: I’ll often ask new clients if they can sacrifice a few trips to Starbucks to pay for their monthly premium. But if that doesn’t work for you, then just find something else in your budget you don’t care about. I’ll never ask someone to cut out something they really like. The reality is we both know you need the life insurance, so let’s find a simple way to pay for it.
Kick-starters: Easy first steps to becoming friends with life insurance
If you’re ready to kick your inner procrastinator to the curb, here are some simple ways to get started.
Do some reading – Spend five or ten minutes reading about the different types of life insurance. There’s only a few main ones, so it won’t take very long to get an idea of what’s out there. We have a helpful table breaking down the different options on this page.
Try a calculator – Still not even sure if you need life insurance? Just drop some rough estimates of your expenses and assets into this calculator to get a quick snapshot of how much you might need. Honestly, the whole thing takes like two minutes.
Get setup with an agent or advisor – Once you’ve done a bit of reading, it’s best to get put in touch with a qualified agent or advisor to take you the rest of the way. Trust me, a good agent or advisor will save you a lot of aggravation and speed up the whole process by doing most of the work themselves.
Nad’s wisdom: I’m old school, so for people considering life insurance I’d say just call an agent or advisor once you’ve done a bit of research online. It will be so much easier for you and that way you’ll also have someone to sit with you and explain everything. It’s also comforting for clients to know that everything has been completed correctly on their application. Plus as your life changes, you’ll have a relationship with someone who knows you and can customize your coverage.
- Insurance Barometer Study. LIMRA and Life Happens 2016.