With a huge gap between people wanting life insurance and people not having life insurance, policies should be selling themselves. Let us use an example for ordering dinner to think about this issue. If 4 of 5 people in your house wanted pizza for dinner and only 2 of those people had pizza to eat, I would be willing to bet the next call for dinner would probably be for pizza. Now imagine if everyone in your house thought that pizza cost $100 a slice, then I would imagine that the likelihood of ordering pizza for dinner drops significantly.
So, what is the real problem that the life insurance industry faces with getting people the product they want and deserve? Life insurance has a perception problem, some deserved and some mismanaged. The process to get life insurance is often drawn out and tedious. The life insurance industry has not done a good job addressing the biggest misperception, price.
Most people overestimate the cost of life insurance by as much as 3 times before ever obtaining a quote. If you feel this way you are not alone, 80% of adults feel just like you. People expect to pay well over $100/month for the coverage that you and potentially your family need. While every company is different, the actual price could be as low as $1/day or $30/month for $500,000 in coverage. This is cheaper than a cup of coffee per day. Compare this to the average cost of car insurance in the United States of $139/month for full coverage and about $40/month for the most minimum coverage possible.
Harmonee will provide an in-detail post on how pricing is done for life insurance separately. However, what you should be aware of is the price difference between whole life insurance and term life insurance. In another Harmonee article, found here, we discussed how and why whole life insurance is much more expensive than term life insurance. Other major factors that can affect your premium price is age, gender, height-to-weight ratio, and if you are a smoker. On average, women live longer than men and generally receive cheaper premiums, all other things being equal. Not smoking and being in general good health can also help to reduce your cost of life insurance.
When thinking about the future of your family, your assets, and your beneficiaries the cost of life insurance comes into perspective. For the cost of 2 large pizzas or the delivery fees on your favorite food delivery app per month you could provide lasting security for everything that you have built and begin to secure your legacy for the future.