Why do people avoid life insurance?

Why do people avoid life insurance?

There are various reasons why people avoid life insurance.

Education plays an important role in it. People with less education tend to avoid life insurance as they are not aware of the possibilities. They also do not consider this as an expense they want to add to their budget every month. We need to make sure they know the reason for the security behind Life Insurance. People also think they are too young to die, and they won’t need to spend extra on the premiums. Considering the possibility of safety and security is a precautionary measure.

People also think what if they don’t die by the age of the policy’s maturity, the money is basically wasted. We should think otherwise. On one side, we are assuring the safety of our family without any stress, and on the other side, if you don’t die, you get to spend all the time with your family.

Life insurance

I cannot afford it

It is not possible for every individual to spare their monthly income on insurance premiums. Being able to afford food twice a day and shelter every night for their family is their priority. In situations like these, we cannot expect them to think about their secure future when they are not sure about their family’s present.

Invest in something else?

People also try to invest in something with a fixed return where they do not really have to die to get the benefit. Investing in fixed deposits, stock market, banks, real estate, or bonds is expected to give higher returns and a lot of people have it as plan B. However, there is a lot of risks associated with it. If you buy a property on financing to expect a return later, you might get your family stuck with paying the debt off for a long period of time. Which is why life insurance is considered necessary.

Life Insurance

Misconceptions and lack of trust

Lack of trust or misconceptions is also a huge reason people tend to avoid life insurance. When you ask people about the actual cost for the premium for a certain amount of return, people guess wrong and are unsure of the amount in the first place. For example, if you are getting a policy of a return with $250,000, a 24-year-old guessed the yearly premium to be $1000 and a 30-year-old guessed it to be $400 per annum. These are the differences of not being knowledgeable and being unsure about investing in a life insurance policy.


Even if people are well off, they tend to have other financial priorities. People have their timelines, dreams, and ambitions. It is a priority for a happier lifestyle as compared to having security for life. By the time they get older, the premium for life insurance is so high, it doesn’t seem as much worth paying so much.

life insurance

I am not going to die

Death is also something people generally do not like to think about and avoid the conversation or any thought related to it. I have heard people say, “I am healthy, and I don’t think I need life insurance.” Wastage of money is also a huge factor contributing to not having life insurance. It seems like an unnecessary expense.

People also claim to not have any because they do not have any children or responsibilities other than themselves.

Not old enough for life insurance

I am not old enough to need life insurance is the biggest argument I have heard. However, we need to realize if we start earlier, the premium would be much lower with more interest accumulating to the compound. Moreover, life insurance for younger adults is cheaper as compared to when you grow older. If you plan to buy it earlier, the value of your insurance policy is higher than what you will pay at the end.

Forfeiting insurance money

One of the biggest things people consider is what if they don’t die, the money would be all wasted. However, this is insurance for the biggest safety of your family so it is not wise to think that way.


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