It wouldn't be an exaggeration to say that buying life insurance isn't exactly popular. Nearly one out of two people don't have life insurance in this country. And those who do have something, often default because they just don't care enough about it. Well, some of the apathy might be well-deserved. Let's look at a few reasons why buying life insurance isn't popular.
Let's say that there is this person who is the model insurance customer. He never skips a single premium his whole life, and he lives to be 60, before he passes away. Does the insurance company show its gratitude by paying his family immediately? Not if he's someone who's been moving around. At least 10 different major life insurance companies are under investigation for not paying up on hundreds and hundreds of policies. It's not that they would refuse anyone if they walked up with a policy and demanded payment. It's just that they won't make efforts to locate anyone's family on their own. The law requires that insurance companies keep checking out the Social Security Administration's files to see who's died. But they don't.
Buying life insurance isn't a simple matter. They're like cell phone contracts, only more unpleasant and more complicated with hundreds of kinds of coverage, prices, exclusions and special causes going into every single purchase you make. If you want simplicity, term policies - life insurance policies that last for a specific number of years instead of for life - tend to be the cheapest. Insurance salesmen however, will always promote the permanent policies first because they're far more expensive. Most people don't need those policies with all their extra features.
But since insurance agents don't promote permanent policies above everything else, lots of young families just balk at the idea of all the expense involved and back down altogether. Now this is very sad. Families with young children - these are the people who should have affordable coverage. Even if it lasts for just 15 years, it's really worth it. Your family is in its most vulnerable stage with young children then. Once the 15-year policy is over and done with, your children are usually at least 20 years old. These just cost perhaps 20% of what the permanent policies cost. But they are just not profitable enough for the agents to promote.
When you go to buy health insurance, they check your health out so thoroughly, they look for the slightest excuse to reject your case if you have the slightest case of anything. With life insurance, it's much the same thing - they'll even check your hobbies to find out if you do anything risky. They'll do a lot of other things to like check your credit score. If you have poor credit, they think you're likely going to let your policy lapse. They will even charge you more if you fly around a lot on business because they feel that you could die in a crash. Basically, they want to insure you, but they don't want to insure you.
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