While a broad spectrum of the population buys life insurance, what I’m referring to in the title is who is apt to, if not initiate the call to purchase of life insurance, at least be very receptive to taking the call? I have found there to be two categories of people that, more than the general population, are predisposed to buy life insurance.
The first is that group of people who have witnessed firsthand the premature death of someone close to them. It could be a family member, a friend or a co-worker, and it usually doesn’t matter whether the deceased had life insurance or not. It’s just that the death is a grim reminder of how fleeting life can be.
A sub-set of that group is people who have seen the hardships that can occur when someone dies under insured. I knew a gentleman who bought a significant amount of life insurance as a young man. The reason? His father died when he was a freshman in high school, and that meant he had to transfer from a private high school to the public high school. It also meant working his way through a community college and the state university as opposed to private college.
Now he was none the worse for his experience (well, except for not having his Dad around), but he had his heart set on going to Notre Dame and that didn’t happen. He bought a significant amount of life insurance to make sure the same fate didn’t befall his children.
The same effect can happen if the person died with an adequate amount of life insurance. One might observe that, “Gee, Johnny’s Dad died and the family didn’t seem to miss a beat. They still went on vacation and Johnny and his siblings went to good schools. Johnny’s Dad must have had life insurance. That is what I would want to happen to my family if fate should break my stride.”
The second category is people whose parents bought life insurance on them as youngsters, even a nominal policy. The thinking seems to be “Mom and Dad must have known what they were doing, perhaps it’s appropriate for me to increase what they started.”
Just as an aside, life insurance on children is one of the last things to do, after the parents’ life insurance program is in place and retirement and college education plans are being aggressively funded.
So while most reasonable people who fit the life insurance buying profile are able to be cajoled into meeting with an agent, few will actually seek one out. Except for, perhaps, those falling into one of the two categories I mentioned. And that is why it is said that life insurance is sold, not bought.