Question

1. Discuss the five main reasons for NOT buying insurance

Answer 1

Answer

The five reasons for not buying insurance are:

1. Ignorant about the financial risks

Most people prefer to stay in denial thinking that ‘nothing will happen to me’ and hence they prefer to stay self-insured rather than buying an insurance policy to get protection against the risks.

2. No understanding of insurance products

Today, the insurance companies offer different types of insurance products to suit the varying needs of the customers. However, the availability of different options often confuses the customer, and it makes it difficult for them to choose the right plan to suit their needs.

3. Insurance provided by the employer

This is one of the most common reasons why people avoid buying a life insurance policy. Many organisations provide an insurance cover for all their employees. However, the insurance offered by employer provides only basic benefit, and it may not be enough to suit all the needs.

4. Good health

A lot of people put off buying life insurance because they believe that they are young and healthy and don’t need insurance.

5. Procrastination

Having life insurance is not mandatory. Also, there is no law regarding the right age to buy an insurance cover. People don’t consider protection a priority and tend to believe they can buy it later.