Today’s post is a guest post from Ravi Ahuja of MoneyGlare. If you have an interest in guest posting, please see our guest posting guidelines.


Let me start by asking you a simple but important question. Have you prepared for yourself a “Must-Have” list? Or, let me put it in another way. Have you prepared a list of what you aspire to achieve in your life? Having a list in place or not, one generally wants many things to achieve in his or her life. Dreams are a part and parcel of our lives, and I am quite sure one of your aspirations would be to have a happy and secured family life. Isn’t it so?

If this is true then why is it so that people do not feature life insurance in their “Priority-List” or “Must-Have List?” Why is it so that people don’t buy life insurance? Life insurance is an instrument that safeguards your family’s financial interests in case something unfortunate happens to you. Life Insurance gives financial security to your family and compensates them with the life cover amount if you are no more.

This is also our topic of discussion for today. Despite being one of the most important financial instrument that provides well-being and financial security to your family, life insurance has still not become popular with the people. People are just not buying life insurance. As a matter of fact nearly 56% of U.S. householders did not possess an individual life insurance policy. An astonishing figure which is an all time high.

So, let us analyse and figure out the top reasons which are contributing to people not buying life insurance. Are they actually not aware of the benefits of life insurance, or is it something that plagues life insurance? Let me list the important reasons to you one by one.


Reasons People Aren’t Buying Life Insurance

1. As you would have also observed, there is a marked decrease in the habit of saving among the people today. People are simply not saving enough for their future well-being. They are spending for food items, apparel, gadgets, vacations, cars, and other sorts of luxury items. However, they are ignoring this important element called “saving”.  When you are not saving regularly, buying life insurance requires you to put aside a good amount of earnings as premiums for a life insurance policy. Yes, without adequate savings, people just cannot think about life insurance.

2. Buying life insurance is considered as a “regular” expense by people. When something is considered as an expense, the attitude is generally to avoid such an expense. As life insurance benefits are not derived while you are paying your premiums and it comes into play after a rather long duration, people consider paying its premiums as an expense. Hence, it has become quite uncommon with the people.

3. Life insurance is considered as an unprofitable investment instrument. Only a part of your premium is invested and the rest goes for paying other charges linked with life insurance. When compared with other pure investment instruments like stocks and mutual funds, life insurance falls short in its aspect of returns. Also, some life insurance plans do not have an investment angle at all – for example, a term life insurance plan.

4. In today’s family structure, both husband and wife are working to earn their living. This has given families a sort of financial freedom. Both are themselves equipped to meet their future needs and aspirations. So, life insurance has slipped from the number one spot as a “must-have” instrument for family security.

5. Another major reason for a large proportion of people not buying life insurance is that they lack trust in the industry as a whole. They are not sure that the money they put aside in burial insurance policies would be actually given to their legitimate heirs once they are gone.

So, these are the main reasons why people don’t buy life insurance. Having analyzed the reasons we can now clearly see that life insurance is still important in our lives although many issues circle around it. If we are able to sort and address the above issues, life insurance has the potential to become popular with the people again. Actually, the usefulness and value of life insurance is still important. We cannot ignore having it as life is still uncertain and insecure.

About the Author: Ravi Ahuja is fulltime blogger who write for his blog which focus on saving, investments, insurance and personal finance.