Americans’ Perception of Life Insurance
To less developed countries, the United States of America may appear like the country club of the world, full of people who can buy whatever they want. But although America’s per capita income is much higher than that of most other countries, many in our nation lack life insurance, something that’s viewed as indispensable to protect one’s family. Some truly can’t afford it, while others don’t view insurance as being something important enough to put money in. According to QuickQuote, while 83 percent of Americans have auto insurance and 78 percent have medical insurance, the statistics are much lower for those who have life insurance.
Only a little more than half of the population have life insurance: 53 percent, according to QuickQuote. This is only slightly higher than those with dental insurance (51 percent), and a full 8 percent lower than the 61 percent of Americans with homeowners or renters insurance, according to QuickQuote. According to the LIFE Foundation, 68 million adult Americans don’t have life insurance, and those who do have policies average a death benefit only four times their annual income -- slightly more than half the suggested amount.
The LIFE Foundation suggests that anyone who would suffer financially if a family member were to die should purchase life insurance. Those who choose to purchase a policy should first consider how much of a policy they need based on their lifestyle and needs, and then seek professional help, according to LIFE.But despite the suggestions by the LIFE Foundation, the fact remains that many people don’t have life insurance, even though a term policy could be extremely inexpensive.
A U.S. New and World Report article written by Kimberly Palmer on March 31, 2009 suggests one reason: “For most people, talking about life insurance sounds almost as fun as eating rotten fish.” In other words, the reason is just as simple as the reason doctors say more patients don’t have regular checkups: they just don’t feel like it. Purchasing a life insurance policy generally follows a few meetings with an agent, several pages of less than exciting paperwork, putting your John Hancock on several sheets of paper, and then having a medical exam -- which includes a urine sample and being pricked in order to draw blood.
The article states that one of the major pitfalls people have regarding life insurance is not thinking about it at all. But even those who overcome the disdain for paperwork and apprehension about drawing blood can make mistakes. According to an Allstate article, one misconception about life insurance is that single people or couples without children don’t need life insurance. But a 2005 Allstate article contends that single people who have debt should consider purchasing life insurance to prevent their family members from having to pay off those debts. And if there are no debts, someone will at least have to pay for the funeral. The article also states that they should consider purchasing a policy to help non-immediate family members with their finances. Allstate also fights the misconception that life insurance can be expensive, countering that belief by stating that a healthy 35-year-old female could purchase a $250,000 policy for about $15 a month. Many people can make the mistake of not thinking about their needs in the long run, and thus purchase a policy that’s too small. To most Americans, $100,000 sounds like a lot, but that’s not necessarily the case when a grieving mother pays for a funeral and is facing massive debts -- all while trying to raise children who have lost a father figure.
Life insurance will definitely take a little money out of your budget, and most would agree that it’s important for individuals to protect their family. Some may argue that purchasing an insurance policy that would cover seven times their annual income may be too expensive. Depending upon the situation, this may be correct, and sometimes it’s hard to purchase the policy that’s best. But while many will argue about whether universal, whole or term is the best policy, most would agree that it’s important to at least have a life insurance policy. |
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