InsuranceNewsNet Magazine July 2010 : Page 20
By JosEph W. JoRdAn of varying ages and backgrounds are financially ill-equipped to maintain their standard of living should a pri- mary income-earner die prematurely. Even five to seven years after the death of a spouse, more than one-third of wid- ows and widowers surveyed say they remain financially vulnerable. Why aren’t more individuals buying T life insurance or securing adequate pro- tection? No doubt, there are purchase barriers that need to be overcome. This 20 InsuranceNewsNet Magazine July 2010 he recent ly released MetLi fe study of the financial impact of pre- mature death confirmed that many individuals inertia may be caused by a lack of time or financial resources, as well as other constraints. For example, a top reason so many U.S. households delay purchas- ing more life insurance is the percep- tion that such a policy is too expensive, despite the cost actually being at an all- time low. In addition, many individu- als view selecting the right coverage and product as a complicated process. Decision Making in the Information Age It might seem odd that individuals do not understand the value of life insur- ance, considering all the marketing and educational materials available. All those materials are useful and helpful, but the value is not in the information. David Hume, the famous 18th-century philos- opher, once said, “Intellectual knowledge of something motivates us to do noth- ing.” The issue of so many people being underinsured is broader in context and is the result of two fundamental paradigm shifts that are occurring. The first one is the overuse of analyt- ics and information. As a result of the “Information Age,” the financial ser- vices industry has put a high premium on being narrowly deductive and highly analytical. The thought is that if you give people enough information, they will act in their own self-interest. While
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