Top 10 Reasons Not To Get Life Insurance

At Insurance Hero, we do everything possible to set you up with the best possible life insurance policies that suit your needs.

What if, then, you don’t actually need life insurance? Are there any reasons not to get life insurance?

Truthfully, as much as we’d love to sell you a policy, there are perfectly valid reasons you might not want to get life insurance. We’ve compiled 10 reasons here, along with a little more information, that might make you reconsider.

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Reason 1: Life Insurance Can Be Expensive

Perhaps the biggest argument against life insurance is that it can be expensive. 

That isn’t always true.

Like any insurance, costs can vary greatly depending on your circumstances. Some people can get life insurance coverage for just £6 per month. These people tend to be younger, healthier, and in better life circumstances.

The older you get, the more life tends to weigh on you, and the more your policy can cost.

There are many differences in life circumstances, providers, and term and whole life insurance. The cover you get, how long it lasts, and whether or not the rate adjusts over time will all vary.

Then again, can you put a price on supporting those close to you? Whether you’re a new parent, an elderly grandparent, or even a business owner, if you pass away, those who depend on and rely on you will be left without your support. With insurance, you can keep providing for them even after you’re gone. 

Reason 2: Life Insurance Isn’t a Good “Investment”

Life insurance is a policy you pay into; when you pass away, it pays a death benefit to your beneficiaries.

For most people, though, that number isn’t much when stretched out over time compared to putting the same amount of money into the stock market.

Financial experts have noticed that life insurance perks don’t usually add much to your piggy bank for when you retire.

Why? A large chunk of your first set of payments often goes toward commission costs, reducing the policy’s overall cash value. Also, the policy’s value can take a while to recover from these start-up expenses.

Many variables make it difficult to generalise here. For some people, receiving a death benefit from a loved one’s life insurance policy can be a life-changing amount of money. For others, an annuity barely moves the needle financially.

What it comes down to, though, is that life insurance is insurance, not an investment. 

If you want your money to be put in a high-return growth account, there are investments for that. Life insurance serves a different purpose; even if it doesn’t offer the highest possible growth, it still provides a guaranteed benefit.

Reason 3: You Get Nothing if You Outlive Your Policy

If you buy term life insurance, you choose a term for the coverage. It’s usually measured in decades: 10, 20, 30 years or thereabouts.

Your policy is locked in, and your cover is set during that term. If you pass away through illness, misfortune, or misadventure during that term, your death benefits are paid out when your beneficiary files a claim.

What happens if you buy a policy when you’re 50 for 30 years of coverage, only to turn 80 in good health? With term life insurance, you have two options: roll over into another term (or a whole-life) policy, or abandon the cover entirely.

It’s true that if you choose not to renew your policy, you gain nothing from having that cover for those 30 years. However, is that really the truth? You gained something every year along the way: peace of mind. That life insurance cover was there to remind you that your loved ones are cared for even if something happens to you.

In a way, outliving your policy is “winning.” It means you’ve weathered life’s slings and arrows and come out the other side. 

Reason 4: Life Insurance Companies Don’t Always Pay Out

Well, it’s true: life insurance companies are businesses, and if they paid out every policy they issued, they wouldn’t have the funds to keep going. Some claims don’t qualify, some are fraudulent, and some are rejected.

There are ways to ensure that you or your family does get paid out, however:

• Money from policies can be invested in faster-growing ventures to provide a return
• Some people inevitably outlive their policies and choose not to renew, having paid in without receiving money in return
• Some people will have their death benefits denied

It’s certainly true that life insurance companies would prefer not to pay out when they shouldn’t, but they won’t work obscure loopholes into their contracts just to wage war on people expecting that cover. 

There are valid reasons why life insurance doesn’t pay out. These include fraud, primarily. If you lie on your life insurance application, the insurer can discover it posthumously and use it to deny the claim.

However, most policies don’t deny claims. 97% of claims are paid out.

Reason 5: You Don’t Qualify for Life Insurance

Insurance companies review various aspects of your health to decide whether to issue you a policy. Your age, sex, and overall health are just part of the puzzle. They also look at any illnesses or diseases you may have, habits you’ve had throughout your life, and more. 

Some insurance companies will choose not to issue policies to people with certain traits. For example, people with chronic illnesses like diabetes, cancer, HIV, heart disease, or asthma may not qualify for policies with these companies.

Generally, though, only the most restrictive insurance companies will issue policies to those in good health. Illness is a fact of life, and just because you have an illness doesn’t mean you aren’t managing it well.

People with cancer can be in remission. People with diabetes can manage it. Many life insurance companies will still issue policies to these people, though they may be a little more expensive than for someone in perfect health.

A more likely reason for being declined is working in a high-risk profession or having a high-risk hobby. Pilots, roofers, steelworkers, truck drivers, police officers, and people with hobbies like skydiving, combat sports, and so on might find it harder to find cover.

The cover is out there, and we can help you find it. To get started, click here and fill out our form.

Reason 6: You Have Plenty of Assets Already

Life insurance is meant to provide for someone dependent on you should you unexpectedly pass away. If your passing would cause hardship, especially financial hardship, life insurance is a great option to help ensure they’re taken care of.

What if you already have plenty of assets, though? Maybe you have a well-funded retirement account, an excellent pension, partial ownership in a successful business, or a storeroom packed with valuable collectables waiting to be sold.

Well, all of that may be true. Maybe your loved ones can mourn your passing without worrying about their financial futures.

One of the biggest issues with assets you leave behind is how easily they can be accessed. A stack of cash under the mattress is liquid and easy to access; a bank account and an investment fund are easy to get rolling.

Others are a lot slower, like a share in a business or a pile of valuable comics or trading cards. They’re illiquid assets, meaning your loved ones may face hardship, or even become victims of predatory buyers, when they need to liquidate them.

Life insurance paying out a death benefit gives a guaranteed form of liquid cash to your beneficiaries should you pass. For many, that time is a luxury that is all too often missing when they’re sorting out the details of your passing.

Reason 7: You’re Young and Healthy

One of the most common reasons why people choose not to get life insurance is that they’re young, healthy, and otherwise unafraid of dying.

After all, old age is decades away, you don’t get sick often, you don’t take unnecessary risks, and you’ve never been seriously injured. Why would you need life insurance?

To put it bluntly, this is foolhardy. Young people often feel invincible, but it can take a moment to take it all away. You may not take unnecessary risks, but if you drive anywhere, a car accident can cripple or kill you.

You might eat right and exercise, but cancer doesn’t care and can bring you from the peak of fitness to being bed-bound in months. You might be young, but how many millions of young people now have Long Covid and face much worse prospects than they were just a few short years ago?

None of us can predict the future. That’s the core of insurance: to provide some backing or guarantee to make even the worst events have a silver lining. Some might even argue that when you’re young and healthy is the best time to get life insurance cover; it’s when the losses are more likely to be devastating.

Reason 8: You Already Have Life Insurance Cover

Many people receive some form of life insurance as part of their job benefits package. It’s not guaranteed to be included, but many people see that they have workplace life insurance coverage and decide that’s good enough.

Unfortunately, most workplace-provided life insurance coverage falls below the bare minimum you’d choose on your own.

Many life insurance policies offer a death benefit of 10 times your annual salary, but workplace-provided cover might offer only 2x. It’s so low that it hardly qualifies as something that could “provide” for your family after your passing.

In addition, while some benefits carry over with you (retirement accounts, for example), others don’t. Life insurance coverage from your job only lasts as long as you have that job. That policy evaporates if you’re fired, laid off, or quit.

By purchasing your own cover, you don’t have to worry about it being barely anything or disappearing when you least expect it.

Reason 9: You Don’t Have Any Dependents

Another common reason not to get life insurance is that you don’t have kids. After all, one of the main reasons to get life insurance is to provide for your children when you pass. Why bother getting life insurance if you’re single and have no children?

This can be a real challenge, but the truth is, you can name almost anyone a beneficiary. If you’re young enough and your parents are still alive, you can name them. If you have siblings, you can name them. If you have a trusted, lifelong friend, you can name them.

Even if you’ve lived a solitary life and have no one to call a loved one, you can name a charity as the beneficiary of your policy. It’s a slightly more complex process, but it’s entirely doable.

Reason 10: You Find the Process of Buying Life Insurance Confusing

Life insurance can be confusing. There’s a lot to consider, from the three parties involved to the burden of insurable interest, the differences between term and whole life, and all the various types of insurance. 

Fortunately, we’re here to help make the process simple. As UK life insurance experts, we can answer any questions you may have.

If you’re ready to find a policy, just fill out our form. We can get policy quotes from top insurers in minutes.

Getting Life Insurance At A Certain Age

Some people may want life insurance at a certain age because of their family’s needs. Younger people with very young families, like people over 35, over 40, or over 45 years old, may want a mortgage life insurance policy to ensure the parent who is left has an unencumbered home, offering the family the stability they need.

Older people, like those over 50, over 60 and over 70, may want to make provisions for their funeral and other costs they do not want to leave for their loved ones.

What about people who think they can’t get life insurance when they can?

Insurance Hero has received calls from partners of Firefighters, Farmers, and Scaffolders looking for cover for themselves and asking if their partner could get cover, expecting the request to be turned down or the cost to be prohibitive.

In each case, coverage was obtained, even for people in high-risk occupations. Both people could get coverage, and a cost-effective joint insurance policy could be put on risk.