We know that there are obvious advantages to getting life insurance. These advantages can really be boiled down to the fact that you feel better about what would happen if something unexpected happened to you. Be it your family or business, you get the peace of mind from knowing that life insurance is in place should something unexpected happen to you. But what are the disadvantages of owing life insurance?
Life insurance can be confusing. Not only are you being forced to think about your future and what happens to your loved ones if you are not in it, then you need to figure out what type of coverage to purchase…
- Term life insurance?
- Whole life insurance?
- Universal life insurance?
- Term to 100 life insurance?
What is the best fit for you? It is often overwhelming enough that many Canadians put off making the decision to get life insurance coverage at all.
Another difficult aspect of life insurance in general is that it is a difficult idea because it is making you confront your own mortality. People do not like to think about themselves dying (and rightfully so). The life insurance application process makes you confront this and it is stressful. Added to that is the fact that there may be a medical examination required for the application where someone gives you a needle to draw blood. This can be enough to push some people right out of the process altogether. Keep in mind that times have changed and you can get no medical life insurance now.
Aside from the stress in the original part of the application, the biggest disadvantage of life insurance often comes down to money. So many times you hear that you can do something ‘for less than the cup of coffee a day’. The problem is that I like coffee. I want to drink it today. If I take the money that I was paying for coffee with and spend it elsewhere I don’t get my coffee, and you won’t like me if I don’t get my coffee. Without it I am going to be grumpy and sleepy and generally less fun to be around.
Sure, that’s a bit of an exaggeration, but the reality is that when you get life insurance you are sacrificing money today so that someone else can have money when you die. It is a disadvantage to you while you are alive. Even if it is only the cost of a cup of coffee each day you are still suffering so that your loved ones are looked after. I suspect that many of the people in line at the Tim Horton’s drive-thru have life insurance policies. They have figured out a way to make it so that they can have both. You need to decide for yourself if the disadvantages of life insurance outweigh the benefits.