Deep down, most of us probably know that life insurance is a good investment in our future. But we might be hard wired to avoid engaging with insurance enough to make a decision.

Bad things happen to others

We tend to think that good things are more likely to happen to us, whereas bad things are more likely to happen to others. This kind of optimism could make us think life insurance is more relevant for other people than it is for us.

Shark attack v heart attack

Over 7,000 Australians suffer heart attacks each year, but they don’t make the evening news. Shark attacks do. This often leads people to believe that such events are much more prevalent than they are.

Future dreams. Present actions.

The further out in the future benefits are, the less value they are perceived to have. We have wonderful intentions for ourselves. Our future selves make responsible financial decisions and choose to eat sensibly and exercise regularly. But in the present moment our choices are impatient and we seek immediate gratification. This is called our present bias.

It’s no wonder we find it difficult to pay small insurance premiums today for the benefit of larger protection in the future – we’re just not wired for it.

Multiple choice isn’t always easy

Having too many options is associated with lower satisfaction – causing us to either go with a default option or delay our decision.

In the case of life insurance, it may be better to consult with the experts. That can help us make confident choices from an array of offerings based on an accurate assessment of personal risks.
Life insurance can help you avoid the traps and pitfalls of complex decisions, as it’s designed to accurately assess and price your personal risks.

Additionally, having cover in place helps to mitigate against any negative outcomes associated with these behaviours, such as a tendency to be overconfident, or avoid uncertainty.

If you would like more information please call 1300 ELSTON or contact us to speak to one of our advisers.