Wednesday, July 18, 2018

Dave Ramsey on Term Life Insurance and Whole Life Insurance

April 28, 2015 by  
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http://www.integritymarketingseo.com Dave Ramsey speaks out onTerm Life Insurance vs. Whole Life Insurance. Check out more personal finance videos and Step by Step Guides about Term Life…

Video Rating: 4 / 5

Comments

25 Responses to “Dave Ramsey on Term Life Insurance and Whole Life Insurance”
  1. Michael Andrews Jr. says:

    I respect his passion to be against permanent life insurance. However, I
    notice he never addresses taxation! Yes, taxation of future dollars. While
    none of us know what the tax rate will be 20-30 years from now, you can
    rest assure on ONE FACT, his projection of $500K-$700K will be met with #1.
    Estate tax upon his death and/or the withdraw phase and #2. The tax his
    lovely wife Sharon will have to pay as his beneficiary. These two GREATLY
    reduces said amount to a new low Dave never speak of. It’s the taxes, it’s
    always the taxes in qualified plans, investments, mutual funds, etc. that
    MUST be taken into consideration when planning.

    Interesting side note here; A properly structured Life Insurance contract,
    such as an Indexed Universal Life, that has been carefully crafted to meet
    the IRS Laws of TEFRA, DEFRA and TAMRA guidelines easily assists someone to
    secure an allotment of dollars on a tax advantaged basis. Yet, this is NOT
    a cookie cutter solution, and it’s not for everyone either. The
    fundamentals of financial planning needs to adhere to a basic and
    elementary principle that everyone is unique, with each having their own
    goals, etc.. Can a middle income family enjoy a first class retirement?
    Absolutely! Just not from watching television I’m afraid.?

  2. Ralph Grimes says:

    My suggestion for those that think any type of cash value insurance has
    pros, take the life insurance exam in your state and you’ll see. Anything
    that cv can be used for, can be done for far less with term. It’s simply an
    education issue?

  3. jim phillips says:

    Notice that Dave assumes Tyler is an Insurance Agent….That the only
    reason anyone would like whole life is that they are in the Business. Dave
    makes a lot of assumptions and knows nothing about the average American.
    His hypothetical’s are based on his Salaries. He also makes snide remarks
    about people because he is not face to face with them–thus Dave is
    cowardly as well as arrogant. I am now warning all my church associates not
    to honor his financial advice.?

  4. Anthony Pinto says:

    mutual funds and term insurance. are others insurance are a rip
    off!!!!!!!!!!!!!?

  5. Isaac Wright says:

    For all of you Pro WL, VL, UL You Bet Your Life Agents, if you listen
    carefully he is mainly talking about an Individual that has the money to
    spend on the type of policies mentioned above, if they purchased pure
    coverage (Term) of the same face amount they could use that difference in
    cost to invest themselves and yield more than they would in an Insurance
    Policy also tax free and they wouldn’t have to borrow it at doubled the
    interest if needed.?

  6. jim phillips says:

    Dave assumes that everyone has a 15 year mortgage. He has not the sensory
    capacity to navigate the real world outside the studio. ?

  7. Indrita BeHappy says:

    This is the most ridiculous video I’ve watch in a while. Please people
    don’t listen to him, there are different type of life policies for the
    different situations in life. Not everything is black and white like he is
    pointing it. It makes me so sad when my customers come to me trying to
    change their application because this guy told them to….. Please do more
    research aside from this guy who thinks he knows it all.?

  8. jim phillips says:

    I always thought Dave was an Honest and upright man, but he is cynical, a
    jerk, and he uses an example that fits his model. Notice he uses the word
    “hypothetical”. He assumes the house is paid off. He must not know anything
    about the Average American. Notice how many times this man says IF. Notice
    that he bases everything on his income. Term is not 1/5th the cost of whole
    life. ?

  9. jim phillips says:

    Dave has to own a Term Business. A 32 year old is 52 with two children who
    are no longer dependent. How about leaving your children some wealth Dave!
    20 years in a mutual fund? Dave must make money for referrals. There are no
    mutual funds paying these amounts. This is why the great minds of the
    Financial World use whole life. Folks don’t be deceived by this man who is
    lining his pockets with sales of his materials.?

  10. DisforDubby says:

    I agree with him for the most part, but then I’m stunned at the ending when
    he reveals that he has life insurance of several millions dollars on
    himself… doesn’t he already have enough money by now to be self insured?
    I don’t get it. He’s not “practicing what he preaches”.?

  11. ChozinWunn says:

    Universal life is garbage. Weather it be fixed indexed, variable, global
    indexed. It doesn’t matter. They all are expensive products chaulk full of
    fees. To make it worse, they have ANNUAL RNEWABLE TERMS. I Which means that
    every year the cost of insurance goes up. There is ZERO cash value for the
    first several years(I’ve seen up to 7yrs before-My Father-in-Law’s). If you
    dont over-fund the policy, your cost of insurance will be greater than you
    monthly premiums, and the company will extract from your cash value to make
    the difference. Eventually your cash value depletes completely forcing your
    policy to lapse. Leaving you with NO insurance AND NO CASH VALUE! That’s a
    crappy deal. At least with term, coupled with a financial plan, once your
    policy expires you still have all your savings. You can retire rolling that
    money over into a fixed indexed annuity to preserve principal and take
    interest only payments instead of annuitizing the contract. Thus leaving an
    inheritance for loved ones when you pass (because contract wasn’t
    annuitized). Don’t fall for the Trash Value scam folks. They are high fee
    high COMMISSION products, that cost way too much. Have a Trashvalue agent
    explain every detail of their policy. Policy charge, Premium Expense
    Charge, Per Unit Charge, Surrender Charge. How many non-agents, or even
    agents can explain how these are calculated, and where your premium dollars
    are going. Not to mention the COST OF INSURANCE RATES, that go up every
    year with your attained age. Read your contracts folks.?

  12. Scott McCollum says:

    The problem with Mr Ramseys advice is most will only follow part of his
    plan by buying the term policy but most wont take the rest and invest and
    thats where the problem lies. Most dont have the financial discipline to
    invest the savings from term policies.?

  13. Ly Yang says:

    Speaking from a life insurance agent point of view: The only problem this
    guy have is that he didn’t understand how life insurance work. He would
    have a different opinion on permanent insurance, if he would put away his
    ego and try to gain more understanding. ?

  14. solid84 says:

    Douchebag. What about taxation on that 401k? What if he’s not such a savvy
    investor? What if the kids want to be doctors and he passes away when they
    need him most??

  15. mike dillaha says:

    What if that 32 year old has kids into his forties but the 20 year term
    expires when his youngest is 7 years old? What if he is no longer insurable
    at 52 but still has a child to raise? What if he dies and leaves his wife
    and kids no life insurance? Would it have been at least moderately valuable
    in this hypothetical case? Would it have been more valuable than having no
    life insurance? Something to think about…?

  16. Price4Life says:

    If you are in your 30′s you need to watch this video by Dave Ramsey
    explaining the logic of term life insurance.?

  17. Mark Politi says:

    Mr. Ramsey’s idea to buy term and “INVEST THE REST” sounds real catchy, but
    what are you actually doing when you INVEST? You are exposing yourself and
    your future to market risk. PERIOD. Invest the rest did not sit too well
    for folks who retired in 1987 and 2008 or any other time when the market
    decided to take a dump. The solution is with an Indexed Universal Life
    policy that gives you the upside of the market up to a cap, which
    guarantees by contract that all gains and growth are protected never to go
    down (because your money is not in the market), provides LIVING BENEFITS
    that you don’t have to die to use, and provides you with a tax-free
    retirement income that you can not outlive. Mr. Ramsey can buy all the
    term he wants for cheap but realize 96 to 98% of all term policies expire
    and have no cash value whatsoever, other than for the insurance company,
    and he can choose to expose himself to all the market risk he likes.
    Fortunately for the practical-minded, there’s a much better, much safer,
    much more practical way to take care of your financial needs that will
    allow you to sleep at night regardless of what the market is doing. Even
    if the INVEST THE REST happens to work out for the Ramsey followers, Uncle
    Sam will take his piece of the pie. The IUL with its tax-free retirement
    income, contractual guarantee not to lose your money, Living Benefits, and
    of course the death benefit make it the most logical choice. ?

  18. Reid Nunn says:

    I both agree and disagree with Mr. Ramsey. I’m no longer in the insurance
    business, but I wrote hundreds, if not thousands of policies. Most was
    term life, but substantial whole life. Here is what I found.

    1. Most people cannot afford whole life insurance. So for Mr. Ramsey’s
    audience, who are people trying to get their financial house in order he is
    correct. Whole life insurance is a bad deal.
    2. The reason it is a bad deal is because most of his audience, like most
    of our country, does not have financial discipline. Without it, something
    is going to happen that keeps them from being able to make the premium.
    3. If whole life insurance is such a bad deal, please tell me why rich
    people buy so much of it? It’s actually a terrific deal for them, but
    remember, they have financial stability. Mr. Ramsey’s audience does not.

    I can’t tell you what percent of our populations is stable enough to be
    able to afford and should have whole life, but certainly those who
    successfully complete Mr. Ramsey’s course do qualify.

    In his blindness, Mr. Ramsey ignores some important things.

    1. He often advised people to cash their policies in and do something else
    with the cash. He ignores that if a person has had a whole life policy
    with a real good company, after 10-15 years in many cases the annual
    dividend is often enough to pay the premium. So a person could stop paying
    and have a policy that has enough cash to sustain itself. Sort of like
    having a paid up house.

    2. More than once on the radio I have heard him advise older people to
    drop expensive universal life policies with high premiums. (I am not a fan
    of universal life). But my point is that the cash value could have been
    used to purchase a guaranteed paid up policy that was a good bit more than
    the cash value.

    3. When we get older, term life insurance is not much of an option…at
    least for final expense policies so we don’t burden our heirs, because the
    premiums become simply unaffordable. Think whole life is expensive? Cheap
    compared to what eventually happens with term insurance.

    In closing, Mr. Ramsey certainly knows a lot more about a lot of things
    than I do. He is more successful than I am. But on whole life vs. term,
    he misses the point. One size does not fit all.?

  19. Mbarzon says:

    This is common poor and middle class thinking. These advices are designed
    to reach a larger audience, insurance has been used to transfer wealth for
    generations. If UL really sucks why do big banks offer them to the rich
    people only?

  20. Guy Spearns says:

    The whole life agents sure want to protect their incomes and screw the
    clients. Its ok though… they will all get run over by the truth over the
    next 20 years and most of those companies will be gone… They have to
    screw their clients so they can pay for all the lawsuits that are coming!

  21. Jesus Gutierrez says:

    this guy is assuming everyone will invest their money, because thats what
    normal humans do. But very little people do. What he failed to mention is
    that most major companies pay interest of atleast 3% on the cash value one
    accumuluates on a life policy, all tax free! What do banks offer? Hmm….
    .75%? In a perfect world, Ramsey’s theory would work. But what do you tell
    someone at the age of 60, who isint insurable who didnt save? Told you so?

  22. bond519 says:

    @onecoolgreek: Term is not a scam. Sounds like your friend got scammed by
    an insurance company. If your buddy’s dad had term insurance it wouldn’t
    matter what he died from, the term would have paid.

  23. brian sadberry says:

    @onecoolgreek that has nothing to do with it being a term u idiot …that
    was a mistake on the person or the companies part

  24. Michael Forester says:

    @a1prime1, If he had a whole life policy and times are bad and he couldn’t
    pay his premium then thats when you take your dividend that you are
    receiving to pay the premiums. By the time he reaches 51 he would have had
    the policy inforce long enough that the dividends would be enough to pay
    his premium. own side is the cash value doesn’t grow but he does have
    permanent life insurance (flexability) Ramsey’s idea = terrible. FACT today
    people save less than any generation.

  25. shouldsleep1 says:

    what happens if your 20 year term expires and you are now uninsurable?
    (diabetic, heavy or otherwise sick) you have no savings because you lost
    your job in the recession and you still have a mortgage and a wife and kids
    to support. If you have a renewable policy, you will be paying out the ears
    for it. Buying term and investing the difference only works if you actually
    do it, never lose your job and live until old age! and don’t take any stock
    market losses either! do you feel comfortable now

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