The Top 5 Most Ridiculous Reasons Not To Buy Life Insurance (With Anthony Anderson)

Anthony 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.

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.”

This commentary originally appeared September 27 on Forbes.com

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Tim Maurer, CFP®

Tim Maurer, CFP®, is a Wealth Advisor at Buckingham and also serves as our Director of Personal Finance. Tim’s second book, co-authored with best-selling author, Jim Stovall, is The Ultimate Financial Plan: Balancing Your Money and Life. He is a CNBC contributor and also writes weekly for Forbes.com. He is a graduate of Towson University.

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