Dave Ramsey talks about the reasons behind comprehensive versus term insurance and why he recommends term life insurance over any type of permanent coverage. Sound financial advice from Dave Ramsey. The best term life insurance is anything but permanent life insurance or permanent insurance.
Dave Ramsey in Whole vs. Term registration transcript:
“It’s okay to sign up with the email bag. Tyler from Massachusetts writes:
“” Many people need long-term life insurance. How can you recommend the term to everyone? Don’t you feel like you’re giving them bad advice? Your term life insurance will likely expire when you need it most. Tyler “”
“Speaking like a true life insurance agent, Tyler. How long have you been selling life insurance?
And those weren’t questions. Those were passive aggressive statements, weren’t they, sir? So let’s deal with that.
I can recommend term life insurance as the only thing because the rest is crap. Is a gotcha. It is much better to buy term life insurance at about 5 cents on the dollar for the same amount of insurance and invest the rest of your money. You will end up with much more.
Let’s get on with this for a second. You’ll see what I’m talking about.
Let’s say you are talking to a 32-year-old who has a 4-year-old and a 2-year-old. Let’s visit him in 20 years, when his 20-year level term that I recommend expires. That would make it 52. I’d have a 24-year-old and a 22-year-old. Hypothetically, they should have both finished college, grown up, gone, off the scene. It is no longer a responsibility. The kids have grown up and gone at 52 for that 32-year-old boy 20 years from now.
Let’s see. Your house would pay for 20 years from today because you never heard Dave Ramsey recommend a mortgage for more than 15 years. He would have been debt free for 5 years with the house and everything. Something to think about.
Let’s see. Would you have something in your 401k? Well if you have been investing 15% of your income until you were debt free and after that you burned yourself out on everything and if you had a median household income of $ 40,000 what would you have 20 years later?
Well, you would have between $ 500,000 and $ 700,000 in your mutual funds.
Ok, let’s see. He is 52 years old. Your children have grown up and gone. The house is paid for. There is $ 700,000 in your mutual fund. Dies without life insurance.
See Mom Scott. His wife Scott no children, no mortgage and $ 700,000. I think he can fight Tyler. This is how I recommend term insurance because I recommend making a financial plan called getting out of debt and investing along with the idea that your term insurance is going to expire.
Even if you want to keep temporary insurance and you are healthy, you can choose to do so. I have absolutely no financial need for term life insurance. A little for estate planning, but very minor.
The term life insurance that I have is very simple. It’s so cheap at 47 in the excellent condition I’m in … I don’t smoke and I don’t do all this crazy stuff like jumping out of a plane. So I can get term insurance for nothing and it is so cheap that I am left with several million dollars extra, just SWI. “Sharon wants it.”
She would rather have that than something else on her finger, you know! “
So, comprehensive versus term insurance?
Take Dave Ramsey’s advice seriously. Life coverage insurance, if you have a solid financial plan, is only necessary for a short period of time. Buy forward contracts and take the rest of the money you would save instead of buying a lifetime policy and investing it in your own investment vehicle, such as a mutual fund (recommended by Dave Ramsey), stocks, bonds, or money market.
Many people are sold a whole life policy because the insurance agent was working for his own financial gain rather than having the interest of his client. Those life agents DO get a big paycheck for pushing permanent life insurance like whole life, variable life, universal life and survivor insurance or any life policy with an investment component.
When it comes to term or whole insurance, if you currently have a permanent life policy, you are seriously wasting your money on your life insurance.
You need to go online and ONLY compare term life insurance quotes between life insurance companies and change your whole life policy.
Before canceling your permanent policy, make sure your term policy is in effect before canceling the whole life policy.
Take all the savings (the difference between your lifetime premium and your term life premiums) and invest the difference long-term. As Dave Ramsey says: Pay off your consumer debt and start saving and investing for the long term.
We also recommend that you automate your savings process as well so you don’t have to worry about forgetting to make investments every month. By automating your monthly investments that you have full control over, you set yourself up for financial freedom by practicing good saving habits.
For full term or term insurance, please follow Dave Ramsey’s financial advice and we honestly believe it will have a lot more net worth than the same result you are talking about in the video.