Why We Hesitate: The Psychology Behind Underinsurance

If you’ve ever told yourself you were finally going to look into life insurance—and then somehow never got around to it—you’re not alone. Many of us have the intention, even the motivation, but something just keeps us from taking that next step. It’s not laziness or lack of responsibility. In fact, there are natural, human tendencies that quietly influence our decisions without us realizing it.

Once you understand the psychology behind underinsurance, you can start making clearer, more confident choices for your financial future. Here are three common patterns that often play a role:

Cost misperception

Many people hold back because they assume life insurance will break the budget. In reality, 72% of Americans overestimate the cost of life insurance. This incorrect assumption becomes a major roadblock, even though policies are often much more affordable than people expect.

Normalcy bias

This belief that things will continue as they are prevents people from preparing for emergencies that seem unlikely but can happen to anyone. If life has always felt stable, it’s easy to think, “Nothing bad has happened so far, so I’m probably fine.” That mindset can make it surprisingly easy to put off buying coverage.

Optimism bias

This cognitive bias leads people to believe they’re less at risk than others for serious situations like illness or loss, leading them to delay or avoid getting life insurance. It’s a natural way our brains try to keep us feeling positive—unfortunately, it can also keep us unprotected.

Recognizing these tendencies is the first step in overcoming them. A small action today—getting a quote, researching policy options, or simply starting a conversation—can set you on the path toward the financial security you’ve been meaning to build.