The Psychology Behind Underinsurance: Insights & Solutions

We've all been there—thinking about life insurance, planning to do it, but somehow never actually getting around to it. If this sounds familiar, rest assured, you're not alone. Many people have every intention of securing a policy but get sidetracked. Why is that? It's more than just procrastination; there's a psychological component to this delayed action.

Understanding the psychology behind these actions can help you make informed decisions. Here are a few common mental patterns to consider:

Normalcy Bias

Normalcy bias is the belief that things will always remain the same. This can stop us from preparing for unlikely but possible emergencies, like not purchasing insurance because life has been smooth so far. It's like assuming it won't rain just because today is sunny.

Optimism Bias

Optimism bias leads us to believe we're less at risk compared to others in encountering serious issues, such as illness or loss. It's a feel-good tendency that can unfortunately result in postponing or avoiding life insurance altogether.

Cost Misperception

Did you know that 72% of Americans overestimate the cost of life insurance? This statistic highlights a significant hurdle: many assume policies are pricier than they are. In reality, life insurance is often more affordable, which makes this a surmountable barrier.

Acknowledging these psychological patterns is a powerful first step toward overcoming them. Start today by reaching out to us. We're happy to refer you to a qualified insurance professional for a quote, exploring policy options, or simply having a conversation about life insurance. Your future self will thank you.