Humans are excellent at recognizing patterns, and as a result, we have strong heuristics for determining which things are worth worrying about, based on our own experiences. This particular virus has landed in a weak spot in our collective judgement mechanisms. Most people would consider a 1% chance of some event happening low enough to not worry about the impact of that event, and indeed, in a typical group of people that number is low enough that probably none of your friends or family will die of it.

But if we recalculate the odds in terms of a particular in-group, and tell you that, of the 25 people you know and care about, there's a 22 percent chance that one of them will die, that seems like a large risk, and one you would work hard to avoid.

And if we then polled all of the people like that, the majority of them wouldn't know anyone that had a bad case! We'd have anecdotes popping up constantly telling us "actually it wasn't that bad" and "stop worrying so much", alongside other anecdotes like "my sister was in the hospital for 3 weeks" and "my wife died in the waiting room". And if you look around in reality, you do in fact see both sets of anecdotes.

(I used a 1% rate for serious cases because it's easy to work with, and not because it's accurate. Reality is as always more complex.)