Jumat, 26 Juli 2013

Risk Averse and Risky: Why Canadians Need a Life Insurance Quote

One of the most bandied about terms in the insurance industry is the ever mutable concept of "risk". Risk assessment is a core component of how insurance brokers determine coverage and premiums for their clients, understanding the client's history, expectations of coverage, and liabilities in providing an insurance package while still remaining profitable.
However on the consumer side of the insurance industry, risk has been transposed to mean an aversion or distrust of insurance. The most common phrases you'll hear when people decide not to purchase insurance is "Oh, it's not for me", "That will never happen to me", and the myopic "I'll think about when I'm older".
The late Andy Rooney said it best when he called death "... a distant rumor to the young."
The 2013 RBC Insurance Poll indicated a rather startling trend in Canadians today, particularly on fathers. It's estimated that up to 30% of Canadian fathers do not own any form of life insurance, and do not seek a quote on such. The reasons? 44% of the uninsured believe they have enough investments and other resources to provide for their family. While personal savings can go a long way in securing your family's future when you die, the same poll reported that two out of the five participants had no idea how much their families would actually need when they're gone.
Overall, it's estimated that one in three Canadians adults have no form of life insurance, and are less likely to seek a quote to find what life insurance can offer them. The greatest risk being adults 18-29 and seniors over the age of 59. The reality of the rationalization of the uninsured stems from two major beliefs: that insurance isn't worth the financial risk, or that this risk does not apply to them.
And understandably, with a population so grossly undereducated about insurance policies, life insurance has come be seen as akin to homeowner's, disability, or auto insurance: "Nice to have if it happens, but what if it doesn't happen?" Life insurance, in reality, is conversely risk-free. No one in the world proposes to live forever, so why has life insurance been seen as a risky decision? Interestingly, 22% of Canadians without life insurance have responded that they admit they should have a policy, yet don't evaluate their options or quote their costs.
Short-sighted planning is one cause, particularly among younger demographics. With a cultural presence and ethos increasingly centered in the "now", Canadians feel that planning for the future simply isn't worth the time, effort, and money. Life insurance through an employer is one solution, but this insurance isn't portable and won't protect you if you're laid off or terminated from your job. Furthermore, long-term planning for life insurance guarantees younger adults can obtain lower premiums and greater protection when they start a family or purchase a home. With a market saturated with product options, and ready access to life insurance quotes, this lack of initiative is to blame on the consumer. Life insurance companies want to sell, but consumers are hesitant to buy.
The other issue is simply knowledge, and this affects all demographics equally, though in different ways. Someone in poor health, a senior, or someone who's been spurned or denied by insurance companies in the past may not even realize the options available to them. No medical or guaranteed issue insurance may not always offer the grand cash benefit that everyone wants, but reasonable coverage can always be offered to help you settle your affairs and guarantee tax free benefits to your dependants and family. After all, seniors and those with medical issues are still a market demographic for insurance companies, and these companies are increasingly making efforts to be competitive in that environment.
Knowledge is priceless, and a pint of sweat can save a gallon of blood, so to speak. Your passing will always incur financial costs, your estate will always face taxes, your assets will always be distributed, and your family will always benefit from financial aid. Planning early, and planning smartly by researching your life insurance options, obtaining quotes, and researching the market can provide you with peace of mind, and protection for your family. Anything less is just risk taking behavior.

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