Are you a monkey when it comes to your insurance portfolio?

ARE YOU "MONKEYING AROUND" WITH YOUR INSURANCE? 

In Tony Robbins book, MONEY, Master the Game, he speaks about how people do not like to save because they think that they are actually giving it up instead of setting it aside for their future self. He tells us about monkeys who are elated when given one apple and really overly exhilarated when given two apples. Makes sense right? But guess what happens when the monkeys who were given two apples had one taken away. Even though they were excited to have one apple, they forgot all of that and when one was taken away (and remember, they still had the one) they, as Tony says in scientific terms, “They were mad as hell!”

Are we also like this monkey? Or can we set one apple aside for our future? I know this is hard and I will tell you that I’ve struggled with setting aside the apples of my finances for years. My my insurance readers, please be patient because I will get to saving "apples" applies to insurance in a moment. For now, please ask yourself whether you’ve saved apples for your future, saved enough apples, or continue with saving apples on a continual and consistent basis. Tony explains that when we think we are losing an apple (like the monkey) we won’t do it! But here’s a solution that Shlomo Benartzi of ULCA Anderson School of Management and Richard Thaler of the University of Chicago came up with that they call: Save More Tomorrow.

I remember challenging my uncle when I was a young teenager when he went for seconds on my mother's apple pie. I said, "I thought you were on a diet?" He said to me, "Oh, I'll start again tomorrow" and he was totally serious! So I know this thought pattern is out there and this Save More Tomorrow could really work. 

The Save More Tomorrow (SMarT) is a program that agrees with people that they can “save more tomorrow, so don’t bother me today; but OK, I can squeeze let’s say, 3% of what I earn and put it away for my future” and “Sure, I’ll increase this (in the future) when I get raises, get a bonus, a gift or money, etc., but not today”. So people set aside a very small amount and to their amazement, over just several years these people are saving a whopping 19% of their income. (Actually they are not saving in the low paying interest savings accounts at their local bank or credit union, but higher payout options, but even starting with deposits in a savings account would be a positive but I don’t have time to address that here). 

The point is that people feel that when they put money aside, they are "losing it" so they don’t want to, but agree that 3% is so little that they won’t miss it "losing it", so they do it and over time they reap the rewards of  a larger amount of money set aside, (still not feeling any negative aspects) and actually realizing some amazing compound interest!

So, now let me talk to my insurance friends. All of the above is great in one’s realm of finances and saving, right? But let’s apply this to another part of finances which is one’s area of insurance; that of insuring one’s life, legacy and health. Who wants to set aside money for something they may not use like health insurance or something they themselves may not be around to experience themselves (life insurance)? Why should I give up this apple today for these results that I may or may not see tomorrow?

Using the exact same premise in Tony's information above, why not set something aside today in such a small amount that you won’t notice it and then increase it later in the future? Start small with your insurance portfolio, but start with something, no matter what age you are. We know that we need to get our exposures covered but that we’ll get to it someday, but unfortunately sometimes  “someday” gets to us first. 

The hardest part of most things is taking the first step and starting something. Jack Canfield in his book, The Success Principles, states that we all have what he calls "attention units". These are things that are always on our mind, things that we want to get to but don’t and so they take up real estate in our head. When we are thinking of things like this, since we can only think of one thing at a time, these attention units take the place of more fun and positive things that we could be thinking! My advice (that I also continually tell myself) is to get rid of these attention units. I say that when we have too many attention units, that we truly have an attention deficit!

ACTION POINT: Why not see how much just a little life insurance would be and start today, then increase it in the future when you can? Find out how much it would be to protect your “money machine” which is you, and your ability to create an income. When you get sick your health insurance pays the doctors but who pays you? Protect yourself and your ability to make an income so your house, car and other necessities are taken care of while you are forced away from making income while recuperating.

You may be surprised just how affordable it is to set that apple aside for your future protection. Why  monkey around with your insurance needs? Do something small with your insurance portfolio today and increase it in the future; but at least start.

My name is Terry L.Scott and I’m glad to be in the Life and Legacy business; finally insurance really is affordable!