Life insurance is one of the few financial products that forces us to confront something most of us would rather ignore: our own mortality. That simple fact reveals a surprising amount about why so many adults delay getting coverage, even when they know in their hearts that it’s:
- Logical
- Often affordable
- Highly beneficial
This reluctance isn’t just about money; it’s about human psychology.
The Mortality Paradox
People are good at planning for the future. But there’s one significant caveat: we’re good at it when that future feels positive:
- Saving for holidays
- Investing for retirement
- Setting career goals
Planning for a scenario where we aren’t even here is unpleasant, so the brain instinctively resists to protect us. Researchers call this the “mortality paradox”:
- We know death is inevitable
- We behave as if it’s a distant, abstract concept that won’t apply personally
Life insurance requires us to think about the one outcome we spend most of our lives avoiding, so we delay, downplay, or ignore it entirely.
Optimism Bias in Daily Life
Another factor in this emotionally complex equation is optimism bias:
- The (typically unconscious and unfounded) belief that bad things are less likely to happen to us than to others.
This affects everything from how carefully we drive to how we assess daily risk. When applied to life insurance, optimism bias manifests itself in predictable ways:
- “I’m healthy; I don’t need it yet.”
- “Something like that won’t happen to me.”
- “I’ll sort it out later.”
The irony is that optimism bias remains a potent force, even when logic forces people to take precautions in other areas:
- Insuring their car
- Locking their home
- Adding a protective cover to their phone
We’re great at protecting objects that can be replaced, while overlooking the one thing that can’t.
The Emotional Distance of Future Planning
As humans, we tend to prioritise short-term gains over long-term resilience, a behavioural pattern known as present bias. Life insurance lives firmly in the ‘benefit later’ category, which makes it psychologically easy to push aside in favour of more urgent or gratifying expenses.
Life insurance doesn’t offer immediate rewards. While we might argue that the peace of mind it brings is a tangible benefit, most of us just pay the premiums, and nothing appears to change.
The Hidden Strength of Invisible Safety Nets
Life insurance represents one of the most powerful safety nets available. It protects more than finances; it protects decisions. A payout can:
- Prevent families from needing to relocate.
- Give children educational choices that might otherwise be unavailable.
- Keep a business functioning long enough to recover.
- Eliminate debts that could cause years of stress.
These aren’t luxuries; they’re stabilisers. They give families and business partners time, options, and breathing room at the very moment when their emotional resilience is already stretched too thin.
The Truth of the Matter
Life insurance isn’t complicated because the product itself is complex. It’s complicated because we are, and it incorporates:
- Human psychology
- Emotional avoidanc
- Behavioural biases
These shape the way we approach this topic far more than practical considerations, and understanding them can make the decision feel lighter and more empowering. At its core, life insurance is a way of extending:
- Care
- Protection
- Structure
It reaches far beyond the present moment to represent something more meaningful than a standard financial transaction.
