Dave Ramsey advice

[tkennedy]

Listening to his show today. He talks about the need for life insurance decreasing as we age and do away with debt and let our investments take over our life insurance needs. He stated that by age 50-60 one should be self insured.

Then in the next breath he is promoting Xander insurance and says that is where he buys all his term insurance. I have heard him many times before state that he "just bought a new term life policy" etc. Of all people should he not be totally self insured? Seems like a contradiction to me.

[james.hendrickson]

You're not the only person to make this observation.

[TexasHusker]

Dave Ramsey is in it for Dave Ramsey.

[Fishindude77]

Dave is promoting Zander because they pay him to advertise on his program. Your first observation is correct. If you have significant new worth financial resources, there really isn't much need for life insurance. Life insurance is for young families just getting started building wealth, so that if a spouse dies there are resources to keep the family together, support the children, etc.

[disneysteve]

Don't some well off folks use life insurance as a way to transfer wealth to their heirs? I seem to recall hearing that. It makes up for them getting whacked by the estate tax. A basic term policy is a pretty cheap way to maintain a couple million dollars for your spouse or kids. I've also heard of people having a term policy with a charity as the beneficiary so that upon their death, the charity gets a big chunk of money that the person couldn't have afforded to give them while they were alive.

[TexasHusker]

Don't some well off folks use life insurance as a way to transfer wealth to their heirs? I seem to recall hearing that. It makes up for them getting whacked by the estate tax. A basic term policy is a pretty cheap way to maintain a couple million dollars for your spouse or kids. I've also heard of people having a term policy with a charity as the beneficiary so that upon their death, the charity gets a big chunk of money that the person couldn't have afforded to give them while they were alive.

Yes, that is more of an estate planning exercise, which is a different concept to what Dave is preaching. It is ironic that he advises that folks in their 50s don't need life insurance, yet he's supposedly buying it from a certain Zander Insurance.

I also don't for a minute believe the guy has no credit cards. If you travel at all, not having a credit card is a complete show-stopper, I don't care if you're the Queen Mother.

[Gailete]

If you travel at all, not having a credit card is a complete show-stopper,

The closest my one son comes to a credit card is his debit card, and he travels including airfare and rental cars. Somehow he has figured out how to do it.

[Gailete]

Listening to his show today. He talks about the need for life insurance decreasing as we age and do away with debt and let our investments take over our life insurance needs. He stated that by age 50-60 one should be self insured.

Then in the next breath he is promoting Xander insurance and says that is where he buys all his term insurance. I have heard him many times before state that he "just bought a new term life policy" etc. Of all people should he not be totally self insured? Seems like a contradiction to me.

I used to work with a nurse that was not married and had no children of her own. We had life insurance policies through work and I think you could by more and she did. I asked her why and she said it was her way to leave something more to her nieces than what she normally could.

[tkennedy]

Soooooo........ if you go with his philosophy and buy all term and then your investment plan does not work out what happens when you are in your 60's and need life insurance to protect your spouse? Term does not work at older ages - so if you are lucky enough to still be healthy and insurable you get to go buy a permanent policy for lots of $$$$$.

Wealthy people buy LOTS of life insurance to pay their estate taxes - and they do not buy term. Why? Because they need the insurance as long as they live and if they live to their 80-90's (which odds are they will) they need permanent life insurance. Old Dave fails to mention any of this

[tkennedy]

and may I add ....... normal life expectancy is well into your 80's. Term life policies are not in force at the time someone is most likely to die. So if anyone thinks insurance companies do not love to sell term insurance they they are wrong - think about it - pay premiums in on a term policy for 20-30 years and then it is cancelled at the time a death is most likely to occur -

When someone buys permanent insurance then the insurance company is on the hook to pay no matter what - and contrary to what Dave preaches - the death benefit on permanent insurance can and does increase over time - so his statement that all that is paid out at death is the original face amount is not accurate

[disneysteve]

Soooooo........ if you go with his philosophy and buy all term and then your investment plan does not work out what happens when you are in your 60's and need life insurance to protect your spouse?

If you have come here to push whole life insurance, you have TOTALLY come to the wrong place. None of us are that stupid. We've covered that topic in great detail numerous times. So good luck with that.

[disneysteve]

Wealthy people buy LOTS of life insurance to pay their estate taxes - and they do not buy term. Why? Because they need the insurance as long as they live and if they live to their 80-90's (which odds are they will) they need permanent life insurance. Old Dave fails to mention any of this

Because that doesn't apply to 99% of the population and certainly not to Dave's target audience.

[corn18]

and may I add ....... normal life expectancy is well into your 80's. Term life policies are not in force at the time someone is most likely to die. So if anyone thinks insurance companies do not love to sell term insurance they they are wrong - think about it - pay premiums in on a term policy for 20-30 years and then it is cancelled at the time a death is most likely to occur -

When someone buys permanent insurance then the insurance company is on the hook to pay no matter what - and contrary to what Dave preaches - the death benefit on permanent insurance can and does increase over time - so his statement that all that is paid out at death is the original face amount is not accurate

Wrong. Global life expectancy is 71. U.S. is 78. I have a 30 year term policy that expires at age 78.

And what DS said.

[tkennedy]

If you have come here to push whole life insurance, you have TOTALLY come to the wrong place. None of us are that stupid. We've covered that topic in great detail numerous times. So good luck with that.

I did not "come here" to push anything - gentleman above asked an estate tax question and I responded - thanks for a warm welcome to your forum

[tkennedy]

Wrong. Global life expectancy is 71. U.S. is 78. I have a 30 year term policy that expires at age 78.

And what DS said.

Again I stated a simple fact for thought - what if you are still alive at 78 and your investments did not pan out to enough to replace necessary income?