Life insurance is deceptively named. In reality, people are buying ‘death insurance’. You’re not protecting yourself when you pay towards a policy, and the reality is that you’ll never see that money again. Yet, a life insurance policy offers protection, security and comfort for your loved ones. Many people would do anything for their family, their partner and their dependents, so why are so many people living without any kind of life insurance cover? 
Denial
If someone told you that you’d die in five years, and that the simple act of investing £1,200 at a rate of just £20 a month would leave your husband, wife, son or daughter with a £150,000 payout when it happened, you’d consider yourself stupid not to take them up on their offer. Yet, when you’re young and healthy, it’s hard to think ahead. In the back of our minds, we’re all aware that our lives could end at any moment. Since it’s not a pleasant thought, we deny that fact and try to make plans for old age. Unfortunately, a large number of people that put off buying life insurance will never get around to doing it.
Old Age
You can’t take out a life insurance policy if you’re under 18. If you’re over the age of 65, then policies become much harder to find. Some insurance companies will let you take out a policy that protects you until you’re 90 years old, but these are relatively rare. Taking out a 50-year policy when you’re 25 years old will protect you until you’re 75. That’s about the best deal that you’ll be able to find, and you’re no longer covered once you’re 76 years old.
Life insurance companies don’t want to pay out more than they receive. Their policies have an end date, and you don’t get your money back. This technique ensures that people who live to real old age aren’t covered by a life insurance policy when their risk of death is particularly high. Life insurance policies best protect those that die in adulthood, but not in old age.
Price Misconceptions
We’re constantly being told to compare insurance prices, and to look out for the right policy. We’re warned that the cheapest policies aren’t always best, and that budget insurance companies will find any excuse not to accept a claim. Insurance ends up seeming very expensive.
Yet, life insurance is a relatively low-cost purchase. Annual premiums can be split into monthly payments, and if you take out the policy when you’re young and healthy then it can cost less than £10 a month. You’ll want to consider ‘extras’ like critical illness cover, but the beauty of life insurance is that you can usually go for the cheapest quote. Life insurance policies pay out as long as you’ve been honest when you’ve filled in your application – companies can’t deny that you’re no longer alive.
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