The Top 5 Ridiculous Reasons NOT To Buy Life Insurance–With Anthony Anderson

Originally in ForbesAnthony Anderson is a funny dude. The Emmy-nominated actor has been making people laugh on television and in film for 20 years. But now he’s bringing his sense of humor to a surprisingly unfunny topic—the need for life insurance.

Anthony Anderson and son

The big question I had for him was: Why? Why, with your career exploding and recent Emmy nomination (for lead actor in the show Black-ish), are you investing time and effort to be the spokesperson for Life Insurance Awareness Month?

“I know firsthand from friends and other family members who’ve never had a policy, who’ve never thought about having a policy.  And then all of a sudden someone passes in their family and they don’t know what to do,” Anderson told me.

Fair enough. Many people aren’t even aware of the need for life insurance, and that lack of education is a big concern for Anderson, and a major driver of his dedication to public awareness.  But as we continued our conversation, it shifted focus. What it seemed to begin revealing were some of the tragically comic, ridiculous reasons that many people choose not to buy life insurance. Here are the Top 5:

5) I’ve got more important things to insure.

“People insure their flat screen televisions, they insure their cars, they insure jewelry, but they don’t insure themselves,” says Anderson with a chuckle. He’s also evidently frustrated by this reality. “If it weren’t for themselves, they would have none of those things to insure.”

Even if we don’t have our possessions insured, we can replace them. “The only thing that’s different in that is we cannot replace the person who has passed on, but because you’ve got the ‘extended warranty’ in life insurance, life still goes on the way that you’re accustomed to it going on, and you don’t have a worry [about the money],” says Anderson.

4) I don’t want to deal with a life insurance salesperson.

Yes, there are some insurance agents who have helped perpetuate the stereotype. You know the one. It involves a pushy salesman with a comb-over and a fascination with death. But there are many more insurance agents who see their business as nothing short of a public service.

Anderson grew up on the streets of Compton—as in Straight Outta Compton, the popular new movie based on the lives of the young men who comprised the rap group and cultural phenomenon NWA. “That was my childhood you watched on that screen,” he says. “That’s what I lived through. I used to go see World Class Wreckin’ Cru and Andre Young, who went on to become Dr. Dre, at Skateland U.S.A. I lived that as a 16-year-old kid.”

But when Anderson turned 18, he came face-to-face with another member of the Compton establishment—Mary, “the insurance lady.” Mary walked those tough streets, going door-to-door, becoming a reliable friend to the families who lived there, including Anderson’s parents. And when he crossed the official barrier into adulthood, she hit him with the question, “Well, Anthony, have you ever thought about life insurance?”

“Not really,” he said.

Thank goodness for Mary, the insurance lady.

3) I’ve got to die to get something out of this.

“Wow, I can get $25,000 for $12 a month. Sign me up!” Anderson recalls. Of course, he didn’t entirely understand how it worked at the time. He thought he was paying his $12 a month to have access to $25,000 in cash should he need it.

“What I didn’t think through, in order for me to cash the policy in, I had to die. I was like ‘Oh, wait a minute, wait a minute, I didn’t think this through.’” But regardless of the pretense, Anderson became the proud owner of his first insurance policy, a policy he still owns to this day.

Now he understands that while some life insurance policies do offer their holders financial benefits during their lives, the primary purpose of life insurance is to take care of those we leave behind. And Anderson seeks to educate others about this fact. The benefit to us as policyholders is knowing that we did the right thing, and that we can help take care of our family even after we’re gone.

2) It’s too expensive.

Life insurance can be expensive. Even though $12 per month for Anderson’s first policy at the age of 18 sounds like a premium most could live with, it was likely a more expensive form of permanent life insurance with a savings component attached to it. Because, for just $13 per month today, a healthy 18-year-old guy can get $250,000 of 20-year term life insurance.

A 30-year-old man who is the picture of health can get a million dollar policy for just $37 per month—a premium guaranteed for 20 years—to ensure his family would have sufficient cash to survive financially in the case of his untimely death. A healthy, 30-year-old woman would pay even less, about $31 monthly.

Yes, insurance can be expensive, depending on the type of coverage and the age and health of the person insured. But it can also be surprisingly inexpensive, eliminating as a viable excuse the second most ridiculous reason not to buy life insurance.

1) I’ll do it—later.

Another cause Anderson supports is education and awareness regarding diabetes, and this is another one that hits close to home. He and his mother both suffer from adult onset, type-two diabetes. If Anderson applied for a new life insurance policy today, it would be vastly more expensive—perhaps prohibitively so—due to an illness he didn’t even have when he bought his first few policies. And his mother, who tried to update one of her own policies recently, was flatly denied because of her health issues.

But the primary point of life insurance isn’t to pay a benefit when we expect to die many years from now. It’s to provide an infusion of cash for our loved ones in the event we leave this earth when we don’t expect to die.

My guess is that Anthony Anderson’s success as an actor and comedian has put him in a unique position, one in which he doesn’t actually need any life insurance to ensure that his family would be financially secure if he died today at the age of 45. But that’s not the case for most 45-year-olds with a spouse and children in college, and it’s even less likely for new 30-something parents or 20-something newlyweds.

“In the past year and a half, I’ve had four or five childhood friends and family members of those childhood friends pass away,” Anderson told me. “Guess what? None of them had life insurance.”

That’s why he’s taking time out of his busy career to talk about life insurance. He’s seen it work. Sadly, he’s seen many more situations where a lack of life insurance made a horrible situation even worse.

“But all I can do is give you the information,” Anderson says. “Then it’s up to you.”

I’m a speaker, author, wealth advisor and director of personal finance for Buckingham and the BAM Alliance. Connect with me on Twitter, Google+, and click HERE to receive my weekly post via email.

How To Avoid Grass-Is-Greener Failures

The Virtual Test Drive

Originally in ForbesA friend of mine had a lifelong dream of opening up a coffee shop and was willing to put a highly successful career on the line to pursue it. Fortunately, he was presented with an amazing opportunity to test-drive his grass-is-greener ideal, and the results might surprise you and offer guidance that you can apply to your next big decision.

Green Pastures With Fence

Dave had it all planned out, even down to the lighting and indie musicians that would be playing on Thursday nights in his vision of the perfect coffeehouse.

Then he got an opportunity that most of us don’t have before we make the plunge: He got to learn the ropes working at the best café in Chicago. He immersed himself in coffee culture for a week of training that was nothing short of blissful. Then, he got a chance to put it to work for another few weeks.

His findings? In an average eight-hour day, he got to interact with customers and craft their coffee concoctions for approximately 20 minutes. The remaining seven hours and 40 minutes were spent with dirty dishes. Lots of dirty dishes.

Short-Term Memory Threatens Long-Term Success

When it comes to investing, rely on long-term wisdom

Originally published CNBCWhen it comes to the market’s peaks and troughs, investors often don’t react as rationally as they might think. In fact, in times of extreme volatility or poor performance, emotions threaten to commandeer our common sense and warp our memory.

Don't Forget --- Image by © Royalty-Free/Corbis

It’s called “recency bias.”

What the heck is recency bias?

Recency bias is basically the tendency to think that trends and patterns we observe in the recent past will continue in the future.

It causes us to unhelpfully overweight our most recent memories and experiences when making investment decisions. We expect that an event is more likely to happen next because it just occurred, or less likely to happen because it hasn’t occurred for some time.

This bias can be a particular problem for investors in financial markets, where mindful forgetfulness amid an around-the-clock media machine is more important today than ever before.

Try thinking about it this way. In the high-visibility and media-saturated arena of pro sports, every gifted athlete knows that the key to success can be found in two short words: “next play.”

Riding the Elephant

Mastering Decision-Making in Money and Life

Originally in ForbesThe most compelling findings regarding financial decision-making are found not in spreadsheets, but in science. A blend of psychology, biology and economics, much of the research on this topic has been around for years. Its application in mainstream personal finance, however, is barely evident. Perhaps a simple analogy will help you begin employing this wisdom in money and life: The Rider and the Elephant.


First, a little background.

Systems 1 and 2

Daniel Kahneman’s tour de force, Thinking, Fast and Slow, leveraged his decades of research with Amos Tversky into practical insight. Most notably, it introduced the broader world to “System 1” and “System 2,” two processors within our brains that send and receive information quite differently.

System 1 is “fast, intuitive, and emotional” while System 2 is “slower, more deliberative, and more logical.” The big punch line is that even though we’d prefer to make important financial decisions with the more rational System 2, System 1 is more often the proverbial decider.

Many other authors have built compelling insights on this scientific foundation. They offer alternative angles and analogies, but I believe the most comprehendible comes from Jonathan Haidt.

Budgeting Guide for the Rich

Originally in Forbes“You don’t really do this stuff—do you?” The question came from a major network anchor after the camera stopped rolling. The topic was budgeting.

He certainly isn’t obtuse, and he wasn’t being patronizing or condescending. It was a legitimate question that accurately reflects the underlying perception held by most people in any demographic–that budgeting is for those just scraping by and young people just getting started. A tedious chore reserved for those lacking the means to do otherwise. A humble state from which most of us hope to graduate.


But this is a misconception. In truth, the budgeting process can help people at every stage of life and every income level articulate and align their deeply held values with their financial priorities, which is the first step on the path to integrating money and life. However, there is more to be gained from the discipline of budgeting (at least in terms of raw dollars) for those of means. Better said, there is less to be lost by families who earn especially high incomes. 

Level: Can a budgeting app change the way we bank?

Originally in Forbes“Level is dedicated to rewriting the financial rulebook to create a secure future for the next generation.” That’s budgeting app Level Money’s stated mission, which can be found on their website’s “About Us” page. But even as lofty as that objective sounds, co-founder and CEO Jake Fuentes says the company’s sights are set even higher.

“Basic everyday money management,” he suggests, could be “the first step toward changing—or creating—the next generation’s banking structure.”

An app that hopes to change the way the next generation banks? I’m listening.



The Keys to Effective Budgeting: Autonomy and Automation

Originally in ForbesMost people avoid budgeting because they consider it an exercise in repressive tedium. But it doesn’t have to be. By applying the science of motivation, economic evidence and the art of creativity, the apparent boredom of budgeting and saving can be remade into part a life-giving financial rhythm.

In his book, Drive, Daniel Pink teaches us that most institutions still use outdated science to motivate. Known as the “carrot-and-stick” approach, Pink demonstrates that the archaic addiction many organizations have to extrinsic motivation is far less effective than intrinsic motivation, which comes from within. The most successful resolutions are those autonomously motivated. In short, the word could is more effective than the overused should.

So, please hear this: Only budget if you want to, on your terms. It’s up to you.


A Misleading Moniker: Financial Literacy Month

Originally in ForbesApril is National Financial Literacy Month, and while I would never argue against financial literacy, I have a fundamental problem with the moniker. Who, after all, would willingly step forward and proudly announce themselves illiterate—at anything?


Unfortunately, I believe that’s what fully embracing the financial literacy movement requires. It positions financial educators as the Dickenses of currency and those who struggle with money as the collective Oliver Twist. Yes, it’s unfortunately true that too many Americans lack optimal—and perhaps even sufficient—personal financial education. But a sweeping declaration that labels the majority of the country financially illiterate does little to advance the cause. And it may even slow the progress we seek.

‘The One-Page Financial Plan’—Simple, But Not Simplistic

Originally in ForbesSimple is hot, even fashionable. But in many cases, it’s for all the wrong reasons. Simple is easier to pitch, explain and sell, and therefore also easier to receive, understand and buy. But when simple devolves into simplistic, becoming a one-dimensional end instead of a user-friendly means, it’s no longer an advantage and may actually be doing damage. Not everything can be turned into a tagline, a rule of thumb or a short cut.

Therefore, when my colleague and New York Times contributor Carl Richards first asked me a couple years ago to think about what a financial plan might look like if it was constrained to a single page, I was skeptical. After all, I’d dedicated my life and work to helping people, primarily in their dealings with money, wholly through the written and spoken word. The fullness of that education seemed impossible to responsibly confine to a single page. Then I read Carl’s new book, The One-Page Financial Plan


At 208 pages, it may be a tad shorter than most personal finance books, but it’s obviously longer than one page. There is, however, a single page in it that I believe will help you understand why the book was written and how it could benefit you. On page 11, toward the end of the book’s introduction, Richards shares with us his family’s first attempt at an actual one-page financial plan.

3 Ways To Write Your Own Story, Like Baseball’s Daniel Norris

Originally in ForbesYesterday, a bearded 21-year-old surfer who lives in a 1978 VW bus, and on a self-imposed annual allowance of $10,000, mowed down my beloved Orioles with a 96-mile-per-hour fastball.

Blue Jays pitcher Daniel Norris isn’t striving to make a statement with his apparently Spartan existence. He’s simply choosing to live life according to his priorities. He’s writing his own story.

According to ESPN, Norris’ values system is strengthened by generational ties and rooted in the topography of Johnson City in northeast Tennessee: “Play outdoors. Love the earth. Live simply. Use only what you need.”

The point of this article is not to compel you to adopt Daniel Norris’ values, but to convince you to live by your own. Here are three ways to do so: