How to Pick the Perfect Term Life Insurance Policy
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Don’t waste money on whole life insurance. Protect your family with term life insurance: https://goo.gl/LFpCEj
SUMMARY
In this video, Dave answers Ray’s question from Facebook. Ray asks, “Why term life insurance instead of whole life insurance? What is the difference?”
Term life insurance is just like any other insurance. You pay for insurance, and your beneficiary gets your money if you die. Cash value insurance, however, doubles as an insurance policy and an investment vehicle.
Say your term life policy costs . The same amount of coverage for whole life would cost you 0: for the insurance and a premium. That’s 20 times more expensive for the same amount of insurance!
Let’s say you want to close your whole life policy. Not only is the rate of return on your money so low that it won’t even allow for growth, but you could even have to borrow your own money that you paid and then pay interest to the insurance company. Additionally, when you die, your beneficiary will receive the face value of your policy, but all the cash you saved up is kept with the insurance company. It’s one of the worst financial products in the world!
Dave always recommends term life insurance. Get 10–12 times your income and cover the ones you love.
RESOURCES
How much term life insurance do I need? Listen here: https://www.daveramsey.com/askdave/insurance/how-much-term-do-i-need
Hear more about the tax implications of cashing out whole life: https://www.daveramsey.com/askdave/taxes/8273
Thinking of switching to term life insurance? Read these term life mistakes to avoid: https://www.daveramsey.com/blog/5-term-life-insurance-mistakes
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You describe fixed term policies — 20 year, 30 year, etc. If you really want to minimize your insurance payment when you are younger, then look at "annually renewable term" life insurance. This is dirt cheap when you are young like this couple at 26. But then the insurance premium increases each year as you get older. Increases are minimal in your 20's and 30's, start noticeable increases in 40's and 50's, then exponential increases in 60's and 70's — by which time you should be self-insured anyway and not need life insurance.
IN ANY MARKET , IN ANY COUNTRY , THERE ARE *DEVELOPERS WHO MAKE MONEY . SO I SAY ALL OF THIS DOOM AND GLOOM , BUT THERE WILL ALWAYS BE PEOPLE WHO MAKES MONEY , BECAUSE PEOPLE ALWAYS WANT MONEY .
Hey, did you guys get 222k subbers on 2/22/22 Twosday?!
Can you do a series talking about the tax impact of leaving a legacy amount in life insurance versus a legacy amount out of an estate or brokerage/investment account? The tax implications could be super helpful for people to understand!
If a 30 year term life insurance policy for X amount is cheaper than a 20 year term life insurance policy, cant you buy a 30 year policy and cancel at 20 years?
Can you guys discuss whole life vs term?
It requires money to make money this is the best secert I have ever heard we don’t make money we make multiple money…
Sounds like Bo worked at Northwestern Mutual.. I interned there as well in college and it made me hate the whole life insurance industry. I “met” with people since I was using the internship as a college credit, but always told them to not buy this plan. Those “financial planners” are goofballs dressed up in pretty suits trying to act like real financial planners, such as Brian and Bo.
you sould do one of these videos but for investing your money. . because there are so much out there that i get lost all the time and have no idea whats good and what bad, whats safe and whats going to steal my money. . .etc. .
Whole Life is TRASH!
Smart… the idea of having a plan that is 10x ur income so that the interest would cover your family
What if you, for example are 30 yo and buy a term life insurance for 30 years and you don’t die in those 30 years? Does the accumulated money just go to waste or it just stops accumulating after the term but your beneficiary gets paid out whatever was accumulated in those 30 years? Thanks
Hello Dave and thank you for your guidance. What are the top two life insurance companies you would recommend? My research says Prudential and Transamerica. But I'm still not sure. I will greatly appreciate your advice.
In addition, all term is not created equal
Thank you!
Hello Sir. Thank you very must for the information. I do have a term life policy. It ends at age 80, what should I do if by some miracle I live to be that age? I am on a fixed SSD income. I am hoping you or someone on this thread can answer my question. Thank you.
So what happens when the 30 years is up? Do you renew the plan or what?
Thank you Dave!
It's amazingy to discovered all what ir is.
Gracias Angélica, cómo están?
But what if you don't die in there term of term life insurance? What if you lived past it? Do you get your $ back??
Zander sells cash value insurance.
I had a client come to me, they went through Zander 9 years ago to get a term policy because he was recently married and just bought a starter home that he knew he wouldn’t be in for more than 5 years. They suggested a 10 year term policy for him and his spouse. Seven years later the client bought a bigger home and then had another child. By the time he came to me he had his 4th child and needed more life insurance. When I walked into his office he told me upfront “Dave Ramsey can do no wrong.. I only want term insurance.” I told him that I offer a multitude of products but before I make a recommendation on what may be best I would just like to ask you some questions. As I proceeded to ask question I found out his term policy that he had previously terminated a year ago and he needed a little under a million for himself and a few hundred thousand for his spouse. When I asked him why he only wants term insurance he spouted a Dave Ramsey infomercial. So I respectfully told him my point of view (which was to purchase a lump sum in term for both of them and a smaller limited pay whole life policy). Needless to say we just did the term. 3 weeks later our underwriting comes back. The wife was declined and the husband was rated. Trying to find a solution for them I asked to look at their current life insurance paperwork to see if there was a conversion option on the wife’s policy.. Unfortunately the company that Zander recommended did not offer permanent life insurance. So she couldn’t get insurance and his term insurance policy ended up costing a little less than how much it would have cost him to buy a whole life policy 7 years ago due to the table rating. And while in my discovery conversation they also did not get a 12% return on their mutual fund nor did they have enough money to purchase a disability policy for them both. Dave YOU should be ashamed of yourself.
Can I get term life insurance for parent that has asked me?
U do get money on term. I have critical illness on mines.
Whats your reccomendation if someone doesn't qualify for term life insurance?
Thank you! ❤
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What about tax code 7702? Everyone google or youtube it.