HomeЛюди и блогиRelated VideosMore From: The Dave Ramsey Show

Why Is Term Insurance Better Than Whole Life Insurance?

1058 ratings | 88227 views
Learn to budget, beat debt, & build a legacy. Visit the online store today: https://goo.gl/GjPwhe Subscribe to stay up to date with the latest videos: http://www.youtube.com/user/DaveRamseyShow?sub_confirmation=1 Welcome to The Dave Ramsey Show like you've never seen it before. The show live streams on YouTube M-F 2-5pm ET! Watch Dave live in studio every day and see behind-the-scenes action from Dave's producers. Watch video profiles of debt-free callers and see them call in live from Ramsey Solutions. During breaks, you'll see exclusive content from people like Rachel Cruze, and Chris Hogan, Christy Wright and Chris Brown —as well as all kinds of other video pieces that we'll unveil every day. The Dave Ramsey Show channel will change the way you experience one of the most popular radio shows in the country!
Html code for embedding videos on your blog
Text Comments (160)
djgmoneyy (18 days ago)
this guy is the best thank for the information
Samantha Liggio (25 days ago)
Look, for most adults whole life is robbery. But there's still a possibility for any kid to not become most adults. I am so grateful to my parents for getting me whole life insurance when I was a baby. I'm chronically ill and disabled, and there's no way I could afford life insurance at current rates, especially not the amount I have. It isn't significant to some people, but if I can pay $150 a year to ensure that if I die when I'm 50 with kids they're not gonna be in debt burying me... it's a real relief to not have that hanging over me.
Nick Pallotta (26 days ago)
By far the worst advice I've ever heard! Dave Ramsey very disappointed that you're telling people to cancel their whole life or universal and get term only! Every person's situation is different! You need to evaluate every person's financial situation and show them the right tools for their specific need! As a financial consultant, this is by far the most narrow-minded video I have ever seen. People, please do not cancel your policies just because Dave Ramsey says its bad! Life happens and you don't know what the future holds with the right tools and guidance you can achieve financial freedom! A great advisor educates their clients on all the various products, and its the client who can then choose what's the best option for his/her situation!
Richie Greenberg (1 month ago)
Whole life and indexed universal life is what helped people in the Great Depression. It also helped people take money out of their policy when their business was not doing as well. Or that slow time of the year. I have an indexed universal life policy because I am building cash value. The IRS considers an index universal life policy a investment if you add more money than your premium.. If you add more money to an indexed universal life policy the IRS considers a modified endowment contract. MEC! I also have a long-term care policy tied to the life insurance policy. With long-term care policies on their own if you need it the money's there for you, but if you are healthy and don't need it you lose the money!! With an index universal life and whole life policy that are tied to long-term care policies if you don't use long-term care policy the cash value is still in the policy. Plus when you're older and you need cash you can withdraw cash from an index universal life policy without paying tax on it. These policies are not needed for people like Dave who's worth 40 million dollars. But for the average person that is almost living hand-to-mouth this is the best investment they can make for themselves and their family.
The Awesomer85 (2 months ago)
I used to work in a call center for an insurance company. Day in and day out, we get phone calls saying, my father/mother paid thousands a year for this policy for decades and now they die and we only got 20 grand??? Hated that job, worse than Walmart.
DannaGoat (2 months ago)
I am doing research trying to find out which is the smartest way to buy life insurance...... I am a 3O y/o F with a 5 year old son and 30 year old M spouse (not married) & we co-own a house. I'm so confused, why would say a 30 year old like myself buy term life insurance and pay into it all these years when you know the chances of you dying within the 10-30 years you have the insurance are slim to none, then when Im 60 it closes and then my premiums go up in order to buy whole at that point. Can someone PLEASE explain to me why I wouldn't just buy Whole now? (other than obviously its more expensive monthly & premium wise, but wont that price equal what id be paying later anyway if I chose term and id still be covered without the inflated price or is there another catch Im missing? if anyone can take a few minutes and tell me their thoughts Id greatly appreciate it. Im new to the world of finances and have very little experience.
Nikki Dale (2 months ago)
The problem with this conversation or the way most people buy either term or whole life insurance is that they don't view it as the tool that it is. Period. Dave talks about the reason middle class people are staying poor is because of products like whole life? Stop comparing a whole life policy to an investment...that's not what it is. It is a guaranteed storage vehicle for your money. Similar to a bank account. The reality is, a whole life insurance policy is not good for everyone. The other reality is that there is a reason whole life has a bad rap...most agents don't understand it. Always think about what the agenda is of the people who are telling you anything. I am an entrepreneur and biz owner. My whole life policy is the best financial tool I have. I can't sell you anything. Dave owns a term life insurance company and he has financial partners that he gets paid on when you buy into his philosophy...hmmmmm.... He always tries to keep the conversation very emotional. He does a good job of skirting around the details. I am going to get with my agent and have him do a video that I can share with everyone to give a real, detailed, technical understanding of each. That way you can make an educated, non emotional decision. I will work on having the video up shortly.
Mary Qayoumi (2 months ago)
Hey Dave, whole life is a legalized theft.
Razine Johnson (2 months ago)
Whole life is the devil..
Frances K (2 months ago)
Here we go, folks! In Canada, the money made in any life policy that builds cash value is creditor protected! Invest the rest? Very very few are like me who "invests the rest". The best policy for young healthy folks is a policy that gets paid off sooner this way its filed away and done! Affordability is term. If you have any type of money building policies you MUST meet with your agent to review the policy and investments. Don't depend on the sales agent, it's our responsibility to monitor our policies. I personally have a return of premium term policy. After the 20 yeras I get 99.9% of all of my premiums I paid! How is that folks!
Tatum Allee (2 months ago)
Thank you for saving me from a horrrrible investment Mr. Ramsey! I'm 19 and am diving head first into financial freedom and had convinced myself whole life was better. A school teacher had told me you get cheaper premiums if you take out your life insurance when your younger and keep it you whole life but this benefit would not outway the huge premium price difference between term and whole life insurance. Thanks for all your knowledge!
Frost Reaper (3 months ago)
I love Primerica TERM ONLY!!!
Letrice Gholson (3 months ago)
You Borrow against the agreement on the death benefit... so it’s not stupid. You can borrow on the policy as is— although you have removed the value of the investment. Dave Ramsey also is making fouls also. You never pay more into a policy than the death benefit, period!! He is such a sycophant!
fauxhawkmullet (3 months ago)
Some whole life do offer an increasing death benefit. Face value plus cash value.
Dahveed24 (4 months ago)
What he forgets is that, yes, WL is more costly, but it WILL pay out when you die. I would rather lose some of the cash value and have my family be paid the pay out than pay 10, 15, 20+ years for the term and die after it lapses, then my family gets NOTHING when I die after the term lapses. He is extremely biased because whole life is something he does not sell, so why would he recommend it? Also, term vs WL is on a needs basis. Also, a good insurance agent would be advising his client to be utilizing the cash value in the policy so they don't lose it. It still makes better returns than most other investments AND has much less risk with the returns. I sell both WL AND term, it just depends on what my clients needs are. DR is plain out saying "NO TO WL" without getting to know the needs of the individual and wants to just sell whatever he sells.
Matthew Kuzma (8 days ago)
they get the money from your 401ks
Christian Paris (4 months ago)
Dave Ramsey has a PHD on all subjects..  Knows everything. what people don't know is that he himself owns several cash value insurance policies.  how do you figure both bill gates and warren buffet each own a $100,000,000 cash value policy. $100 million cash value policies.  Ramsey makes a living off ignorant people that refuse to thing for themselves and do their own du diligence.  for these people is easier to call a show and ask " what should I do?"
Preston Tubbs (4 months ago)
Mario Williams (4 months ago)
PREACH!!!! Great video!
IFD Kla (4 months ago)
This is incorrect, at least for Northwestern Mutual. If you have a Whole Life policy and the insured dies with a death benefit of $15,000 and a cash value of $5,000, the beneficiary will be paid the full death benefit and cash value of the policy for a total of $20,000. "Paid-up" means that the policies premiums have been paid in full. This most commonly occurs with 65-Life policies which is a policy that is set up for the payer to stop making payments once the insured is 65 years old. Even though the premiums are paid, the cash value will still grow with the market's dividends every year, hence growing the total death benefit every year BECAUSE the cash value is included with the death benefit when the insured dies on whole life policies. Source: I work for Northwestern Mutual.
Moss Miracle Hands (5 months ago)
Why does everyone act like you habe to take the money out?....what happens if you actually just use it as life insurance and not worry about the other bs?
AKlescht (6 months ago)
Whole life only makes someone else a lot of money
only buy Term never buy Cash Value because Cash Value is a scam and your descendants will be stuck with the bill.
Leah Garcia (6 months ago)
Dave Ramsey is speaking to an outdated and poorly structured policy. If your agent is only selling the 1980's version of life insurance then yes, what he is saying is true. However the new updated version of life insurance Does Not only pay 1-2℅ interest, Does Not charge you high fees to access your money, and Does Not keep your money when you pass away. By the way we have not even discussed the Tax Free Benefits or The Living Benefits such as Long Term Care and many other options that can be built into your policy. I've been in the industry since 2006 and I use to believe buy term and invest the difference was the right way ..... until I started meeting Baby Boomers who had bought Term Life Insurance and Never invested the difference or worse ...poorly invested the difference and lost money in their investment. Then at the age of 50, 60+ found themselves with a term policy that was due to expire, and with poor health and now unable to qualify or afford ANY type of life insurance due to their age or health. Question,... How many times have you heard of a senior citizen needing long term care assistance and having No Long Term Care Insurance? I see that every week.....!!! it's tragic and heartbreaking to say the least. So ... if you want to see the numbers side by side on a real life example of a properly structured policy that will last your entire life please feel free to message me.
Jeff Thompson (6 months ago)
I don't think Dave truly understands whole life insurance and the opportunity that exists within those policies from an investment standpoint. He is right, do not withdrawl the money early, keep it in there. Do a 20 year pay and see what the policy is worth in 40 years after realizing 40 years of tax deferred growth inside the policy. Dividend rates in Canada right now range from 4-6.5%, not bad when you don't pay any tax as it accumulates. And, what other investments guarantee to give your money back after 20 years with the potential of realizing the upside growth potential, I can tell you not many that have a consistent 4 - 6.5% annual dividend rate.
Noah Wheeler (7 months ago)
How do you get a good credit score without a credit card ???
wiznup (23 days ago)
Great point Noah!!!
judas brute (1 month ago)
why do you want a good credit score? no one should want one. save and pay cash for everything
Noah Wheeler (4 months ago)
You're misunderstanding the question . If you watch this video closely this guy is telling everyone to get rid of there credit cards , My credit score is 800 only because I have credit cards , and loans , and pay my bills on time . How do you build credit without these things ???
Nyjawan Houston (4 months ago)
A credit card is better than a car loan.... but just finance something cheap in your name from a company that reports to credit agencies...... some furniture or appliance.... small and cheap.... do this maybe 2 years and there you go
Brianna CC (6 months ago)
Noah Wheeler make payments on-time on another loan product. Such as a student loan, car loan or mortgage.
Bathily group (7 months ago)
I love you Dave Ramsey❤️🙌🏽
Matt Simon (7 months ago)
I have had Whole life for my 2 kids for 10+ years, and just now realizing the waste of money it is. I guess I need to make some serious changes for this.
Jeff Thompson (6 months ago)
Don't cancel it, get a current illustration from the company who sold you the policy so you can see the returns down the road. Hopefully you got a 20 year pay and not a life pay, even a life pay could still make sense. 20 pays are good because you don't pay a time after 20 years and your balance keeps growing. Cancelling it could be the worst financial decision you make.
chrismontoya79 (7 months ago)
My mom who is 70 years old who rents, and is on a fixed income does NOT need a term policy! Term policies go up in price and by A LOT as you reach 75 years old. The worst part is these term policies expire around age 80! what if she lives to be 81? Both of my grandmas lived way passed 80. My mom doesn't have a lot of money and she doesn't have a huge savings account. She's not apart of the 1%. We are just average Americans. I compared a whole life policy to a term and they are about the same price but at least the whole life won't go up in price and its not gonna cancel her. Something tells me that Dave Ramsey is being paid by somebody to say what he's saying about whole life insurance. I talked to a few insurance brokers who sold both term and whole life and they all said the same thing. "Don't touch the terms when you approach retirement years". Dave Ramsey is giving poor advice and I think its cause he's getting a cut from Zanders life insurance that he ALWAYS advertises for.
wiznup (23 days ago)
I agree with you, I am 61 years old and bought a $15,000 whole life policy last year just to cover my burial expenses. I don't have to worry about the policy premium going up (it is below $50/month) or that it will get canceled or expire before I reach 100 years old. My grandmother lived to be 97. There are good reasons to buy term and there are good reasons to buy whole life.
Ojos de Ismael (7 months ago)
Would term life insurance still payout if you die the same as whole life policy
Brianna CC (6 months ago)
Ojos de Ismael yes however the term policy would have a higher death benefit.
FortNikitaBullion (8 months ago)
Is there any merit for having life insurance on kids to pay for funeral expenses and potentially lost work when one mourns? After all, that can break a lot of people too.
Carolle BUMP (8 months ago)
Hi Dave ,Im interested and looking for insurance for my 51 disable son who living with me .Please give me some advice . I qualify as low income and my son is too . Burial or Life . What is the difference ?
Cristal Hernandez (8 months ago)
Best option is having a term and a whole. Especially when you have small children. Every situation is different , he can only give his opinion people what he is saying does not work for everyone!
JeremyAckerson1 (8 months ago)
What about UL?
Jaime Angulo (8 months ago)
Excellent question. UL and even Indexed UL looks great at the beginning, but the details in the contract mean you have to stay on top of it. Again, the buyer needs to be aware. It still costs more than term, if you want your beneficiary to get the insurance and savings, you will pay more for Option B or C. Most agents pick Option A without telling client, so the family only gets face value. Buyer needs to be really aware that the premium stays the same, or can vary, but the portion that covers cost of insurance gets higher every year. Every UL has a table the states the annual COST OF INSURANCE as a multiplier. 0.77336 per $1,000 of coverage for example. Every year it goes up. Eventually, this eats away at your investment returns, and then your accumulated savings. If you hold on too long, and don't take the money out, you will lose it most likely. UL has many moving parts, so you need someone who can really explain it. I am not a fan at all. Buy a long enough term and invest the difference. At the very least you start accumulating savings immediately. In a UL, saving don't start until year 2 or 3 after you paid the agent full commissions. I have heard the way they sell it and it infuriates me!!!!! They compare it to paying high portions of interest in the early years in a mortgage. But an AMORTIZATION SCALE is fixed and is not comparable to COMPOUND INTEREST ACCRUED over time, especially when it steals the final three years of interest on what would presumably be the highest values in an investment account.
JeremyAckerson1 (8 months ago)
Whole life is not junk. However it only makes sence in rare cases. This guy is annoying and his stats are not correct. Whole life is only designed for wealthy individuals................ Term is the way to go unless you have extra money.
Jaime Angulo (8 months ago)
Very true. When you are in an extremely high income bracket, there are some things you can take advantage of with an insurance policy. But, you would have to be contributing the maximum amounts to tax advantaged accounts before it is in your favor. 401k, Roth and Trad IRAs, SEP, etc. Essentially, if you are not saving more than $23,500 single or $47,000 couple, or the max for self-employed, it makes more sense to buy term and invest heavily.
Sheldon Binns (9 months ago)
Buy term & invest the difference > whole life No argument.
Nick Pallotta (26 days ago)
You obviously having educated yourself on permanent policies.
Safara Ashanti (2 months ago)
A little louder for the people in the back ,They don’t hear you!!
Michael Arasim (4 months ago)
There is plenty of argument against this type of thinking.
Kenny Dung (7 months ago)
Sheldon Binns Yes, someone I met was giving me this advise when I saw him.
elredentor10 (9 months ago)
Is whole life insurance the same as permanent life?
Jaime Angulo (8 months ago)
Edward Casas (10 months ago)
I had a sister who invested in insurance and from experience it was a bad move. From this video, I think insurance is just that- insurance. It should not be used as a investment vehicle. The caller instead of paying for insurance and using it as a savings account , should have invested in a 401k or used the money to either get out of debt or saved it in a liquid asset ie a savings account so that if she needed it she can just take it out of the bank, for the cost of $0.00.
Jaime Angulo (8 months ago)
EXACTLY! I bought a whole life when I was younger, and when I found out the other options that were available to me, I was so upset with myself. Please, tell people to get educated, because it is easy to fall for the pitch. But, when you get the EXPERIENCE, it is truly different. Share your story Edward! Family, friends, etc.
Scott Marcum (10 months ago)
You paint the picture that all WL is the same, many companies have limited pay plans that have guarantees. If you die tomorrow and it cost 25,000.00 for your funeral, and I could offer you a single premium policy for $14,000.00 2 months before you died . You and your family just saved 11,000.00 . How is that a bad thing?
Carol Cherry (1 year ago)
The problem with Term is better, is many people are finding themselves old, sick and uninsurable. They have outlived the term policy, have not built wealth along the way, and will die with no insurance. I believe having a combination of permanent and term is wise.
Nick Pallotta (26 days ago)
Lol Terrible scenario the right one would be... Universal life policies 100k each and the rest term joint first to die 30 year policy when they purchase a home.
Red Chevy (9 months ago)
STUPID investors Bill and Betty: 1) Buy two Cash Value Life Policies ($500K) at $500 each or $1000 both per month. 2) Two years later they want to buy a house, but cannot afford $1500 per month for their house payment PLUS $1000 per month for their Life Insurance. Problem is they cannot stop paying on their policy or they will lose their contributions by paying a huge surrender fee. 3) Bill and Betty continue to rent.
Red Chevy (9 months ago)
SMART investors Jimmy and Janice: 1) Buy two 20 or 30 year term insurance policies, for about $80 to $120 per month for BOTH policies at $500K coverage. 2) Two years later, they saved enough for a down payment and can easily afford $1500 a month for the payment. 3) Jimmy and Janice now have a tax write-off and their house keeps appreciating. Jimmy and Janice also enjoy living in a house instead of an apartment because of all the noisy at night. They sleep well
Carol Cherry (1 year ago)
The mother with the child policy that is paid up, will not regret that decision. Many parents are burying their adult children without life insurance. For many people a Juvenile Whole Life policy makes a lot of sense.
Christopher Willis (1 year ago)
$25k 20 pay could be as low as, just say $47; $47 invested monthly at 7% interest would be 23k after 20 yars.. still a good deal IN THIS SITUATION. it isn't always bad
E Rodriguez (1 year ago)
I don't have kids. But, I advised my sister's to buy term insurance. instead of whole or universal. That way if something happens to them while there still minors. There is money to take care of them. Once their grown, they SHOULDN'T depend on you, financially.
Jeffrey Bonderman (1 year ago)
I love the fact that the only people on these Dave Ramsey videos that promote Whole life insurance are either Whole Life Agents or people that are ignorant or stupid!
Driveway-built (5 months ago)
Jeffrey Bonderman term is IF you did WL is WHEN you die I sold term only =garbage and WL is better only a few $$ more and I love it
Chris G (5 months ago)
Good friend of mine recently became a Financial Planner for New York Life... man, he was pushing whole life insurance on me. I pumped the brakes and simply said no. Only those who sell said product will promote it heavily.
Dudekun (8 months ago)
Jeffrey Bonderman I mean he sounds like an idiot. Let's say your cash value is more than the death benefit? Cancel. It's close? Cancel. Need money for long term care? Cancel. Disabled? Cancel. Now if your term cancels and you don't die what happened to your money. And just forget the cash value. You die? What if you're not covered cause your term ended? What do you do? He isn't making a whole lot of sense. Honestly, though the best insurance would be the one you have when you die. If I was 70 years old, I'd buy term. Save the money. I'm 20 years old right now though, and it makes more sense to get permanent. Because it costs like 10 times as much at the end of the term when I'm 40. Then the term at that point costs the same. When I'm 60 and need another term it'll be about another 10 times as much. That'll make it 100 times initial term. Let's say I'm lucky. I live to 80. Then it'll be roughly another 10 times, if I can even still get insured. That's 1000 times the original price. Now I do have access to quoting tools. I would reccomend permanent to younger people, and term to older people. Now I know he says invest the difference, but what if you invest wrong? He also says don't use a credit card. My credit card gets 1% cash back, I pay it in full every month so I'm not charged interest, and I'm not charged an annual fee. I basically get a 1% discount on everything. I feel like he has some point, but his point is not completely accurate. I would honestly rather sell term three or four times since I can get more commission on it. Also if you take the math on a $500,000 policy, it'd only cost me $80,000 or so my whole life. When I die that's a $420,000 gain. Forget cash value. That's still a gain, still leaves a legacy for my family. Yeah maybe I lose the $200,000 cash value, but yeah still a $220,000 gain. Or maybe I cash out. $120,000 gain for whatever. I dunno he just doesn't make sense. He sounds like he's uneducated.
Rebecca Denton (1 year ago)
how long is a term insurance for and can you get another one when it is done without going through physical exam?
Jaime Angulo (8 months ago)
Excellent questions. You select the term, some companies provide up to 30 or 35 years. Many companies will guarantee insurability, which means you don't have to pass another medical, but they will adjust for your attained age. Example using a major carrier: 27 year old female in excellent health gets a $250,000 term policy for 30 years: $20.68/month At 57, her policy expires. No new medicals, but adjusted for age, a new 20 year term policy for $250,000 is $73.08/month If she were saving appropriately, even $100/month starting at age 27 and gaining 8% in a Roth IRA would give her about $150k tax free at 57. Let's say she max out an IRA at $458/month (or a combination of contribution and employer match in 401k) at 8% is about $680k at 57. At 65, this is almost $1.25 Million. I won't go further because things change near retirement age. Hope this helps.
MistaB1958 (1 year ago)
Did he say that "...let's say you have $5,000 in cash value (CV) and you die...you only get the $15,000 death benefit (DB) and not the savings.  That may be true but isn't that an amazing return on your money depending on the length of time the policy was in force.  You won't get that leaving money in a saving account or C of D in the bank as 85% of people do earning 0.015 - 1.25%.  Several policies have a rider where you get both the CV and the DB according to other videos on YouTube.  I am all for Term Insurance (TL)...but what do you do when at 42 your insurance expires.  What do you do if you are not an employee with group TL or a small business owner whose TL insurance has expired and you have 23 more years to work prior to retirement...???  Answer:  Buy another TL which is going to be 10-20 times higher than your original because at 42 cash value life insurance and term insurance are both expensive.  So now you are praying that the invested difference over 20 years of the TL policy kills in the marketplace....but he forgets to mention...the capital gains taxes one must pay if the money is not tax-deferred.  His comments regarding the wealthy are unfortunate.  Many use insurance as the foundation of their retirement, legacy, estate plans and trusts to shelter against exorbitant taxes.  Most wealthy people do nothing, so he is correct and upon their death pay 50% plus of their estate to the government and their heirs sometimes spend down the balance in many cases to lawyers arguing about who gets what because there was no life insurance or will.  Now that is just plain stupid...Dave...!!!
Kate Phillips (1 year ago)
Wow, I'm a financial writer and I have heard from financial advisors that Ramsey gives misinformation on whole life, and he sure does! He doesn't understand that death benefits GROWS along with cash value. He just told a woman to cancel a policy that will likely earn 4-5% or more when measured over the long haul, with NO taxation, NO risk, and 90% liquidity. (Try borrowing against your 401(k)... LOL, it's not in your control! And it's not considered a quality asset, which is why banks don't lend against mutual funds.) Too many lies to debunk in one comment here... It's a shame that he only recommends the kind of life insurance that is designed to EXPIRE before the insured dies, just like a warranty that expires before your appliance has a problem. Listen to Kim Butler's Prosperity Podcast for the actual truth about life insurance and why typical financial advice doesn't work! Ramsey gives great advice about getting out of debt, but he is NOT licensed or knowledgeable to give investment or insurance advice.
wennan zhang (3 months ago)
Whole Life insurance can NOT earn 4-5% return. Buy term and invest somewhere else is better option Let me do a simple math with you 30 years old male. 500,000 dollars death benefit. 20 years term cost =600 dollars. whole life cost =5600 dollars difference is 5000 dollars per year, lets invest the 5000 dollars With compound interest annually at 4% and 5% , at end of 20 years, the future value is 165,802 dollars for 4% and 186,863 dollars for 5% If this male died at 20th year, insurance company only guaranteed for $500,000 however, with term + 4% investment, 500,000+165,802 = 665,802 dollars with term + 5% investment, 500,000 + 186,863= 686,863 dollars You may argue that term will EXPIRE before the insured died. How about we buy another 20 years term after the first one EXPIRED. 50 years old Male (30+20). 500,000 dollars death benefit 20 years term cost =2000 dollars. whole life cost = 5600 dollars (Bought at age 30 and he makes same payment every year). difference is $3600 at age 50, with cash value $165,802 for 4% and with cash value $186,863 for 5%. lets compound $3600 each year for 20 years ( now you are age 70), the future value with 4% will be $474,782 and the future value with 5% will be $620,793. if this male died at 20th years, insurance company only guaranteed for $500,000 however, with term + 4% investment, $500,000 + 474,782 = $974,782 with term + 5% investment, $500,000 + 620,793 = $1,120,793 Now, at age 70, this male still alive, there's highly chance that he may not qualify for term insurance or its too expensive to own lets say he lived at age, 80 with 4%/5% return= $577,645/ $792,307 85 with 4%/5% return= $702,793/1,011,207 90 with 4%/5% return= 855,056/1,290,585 insurance company may run illustration with better number, but that is NOT Guaranteed.
Julio Guerra (3 months ago)
guitarprodigy100 I am sorry but you don’t make any sense or didn’t pay attention what he said. Get term insurance and invest the rest, if 40 years passed because you didn’t die who in the right mind would renew it by then you should have more than enough to cover your death.
A Millionaire Next Door (3 months ago)
@Kate Phillips - what are your qualifications to make such a statement. Being a financial writer doesn't carry much weight as anyone can write about any subject. Are you a certified financial planner?
Jordan Jauregui (5 months ago)
guitarprodigy100 Have you read the fine print on whole life policies?
AKlescht (6 months ago)
Following his principles after the end of the term you will no longer need any life insurance, you will be totally debt free with a great nest egg built up, if you plan to be debt free with large sums of money in the bank when you pass away life insurance does not matter
Hovik Papi Kirakosyan (1 year ago)
at 6:23 you said that you" never segest lease a car" but you suggesting lease a life insurance(Term Life) ?. Term insurance is like lease a insurance for specific time 5, 10 , 15, 20 years . But then what going to happen. Let me say what going to happened . after that both , and term and permanent life insurance will be so high so you can get NOTHING. Or just get some policy for only $20k for funeral expenses.
Lance Henderson (1 year ago)
What happens if you do not die within the 20 years (Term Life) and your health changes, making it impossible to QUALIFY for life insurance? Does that not mean you wasted that money for 20 years, becasue there is ZERO return on investment? Just a thought. I have always suggested TERM is great to cover you for a period of time, IN CASE something happens. BUT, if there is a need for a benefit later in life, and your desire is to have Life Insurance that can't be lost due to a change in health, then you'll need a perm policy.
Nick Pallotta (26 days ago)
Exactly!!! Man people need to think outside the box and stop listening to Dave Ramsey! You cant bash Permanent policies just because Mr. Ramsey says so...Permanent policies are tools for many situations! Some also have Critical illness that you can take up to 90% of your death benefit so you can GET BETTER! Term is cheap always was and always will be! Whole life is to protect you for later on in life for your family for funeral cost...capital gains and shelter tax!!!
SnipingLIVE (29 days ago)
Lance Henderson Insurance isn’t an investment.. it’s insurance. So don’t think about it like you don’t get any return on investment if you don’t die within your term, because it is there just incase you die. It’s the same as car insurance, no one says after 10 years of not getting in an accident “i didn’t get any return on my investment.” It’s there to cover you just incase the unexpected happens. But where term is better is that it’s about a 1/20 of the cost of whole life insurance where you can put your money into retirement accounts or index funds or whatever and build your own “life insurance” policy that you’ll actually be able to use when you retire.
John Gray (1 year ago)
Nicole and Tony Tucker usually people who have invested the difference of their policy premiums because they bought the cheaper term have more than enough at the end of a 20 year period to self insure. That's sort of the point. Whole life is a forever payment that solves a problem that it created. The reason people who have whole life insurance can't self insure is because they have been paying ridiculously high premiums, thus making additional insurance necessary. A vicious cycle
LuvMaTigger (1 year ago)
I have heard that with term life policies the premiums go up a lot after the initial term, whereas with whole life policies the premiums never go up (they're "locked" in). Is this true?
Nick Pallotta (26 days ago)
YUP! Also term once its done 20 years wtv you have to re-apply and guess what your health condition most probably isnt the same 20 years ago! Think about that!
Jaime Angulo (8 months ago)
It is true, but the real question here is how long do you need insurance? You can buy term up to 30 or 35 years depending on the company. Let's fast forward35 years... are your kids grown? is the mortgage paid off? have you been paying yourself first for 30 to 35 years? Are you investing with a IRA (Roth, if possible) or 401k to get the employer match? If this is all yes, then do you have a need for insurance three decades from now? And funeral costs? If you have $500k cash, I am pretty sure you can pay for a funeral.
Edna Cunanan (1 year ago)
I bought a whole life policy in 1992 for 100k from Metlife fro $103.00 a month. After 15 years, my cash value is 39,000.00. I also have 9K dividends that I can cash out anytime. I have only paid 29,000.00 in premiums. I made 19K and had protection sine 1992. What are you taking about?....
A MILLION GEARS (1 month ago)
Driveway-built Who's the best WL insurance?
Driveway-built (5 months ago)
Mark OnTheBlueRidge you actually don’t “borrow” it’s legitimately your $$ and he said it’s 1-2 % to grow actually no it’s higher then that😂 and it’s not a interest to “borrow” your own money it’s YOUR MONEY he is misinformed every WL is DIFFERENT like every term term is cheap and gives your more coverage cause when that term ends and get term again the premium will be HIGH
Khalil Ali (11 months ago)
Edna Cunanan Out of curiosity, what's the surrender value on such a policy?
Kim Nguyen (1 year ago)
I wish I watch your video before I buy whole insurance, thank you so much , I'm going to cancel today ,and get just term insurance 😀
Manny M (9 hours ago)
Nick Pallotta (26 days ago)
I really hope you dont!!!
Leah Garcia (6 months ago)
Please Message me and get a real side by side comparison before you cancel your policy.
Jeff Thompson (6 months ago)
I really hope you didn't cancel your policy did you? He gave some really bad financial advice, he doesn't understand the product very well.
Scott W Johnson (10 months ago)
Term rules the day
tangleasscattle (1 year ago)
I'm curious how Dave Ramsey feels about and index whole life?
OkHibba (1 year ago)
You may be right about Universal Life Insurance, Dave, but you are not giving your callers info on INDEXED UNIVERSAL LIFE. IUL accumulates at whatever amount the owner can contribute monthly, and then grows at a capped interest rate, usually 6 - 12% a year!! It is guaranteed to stay at that rate for the life of the policy, never losing money even when the indexes have a losing year. If you want more info, call me Jude, 832-633-3190
Coleen Herrick (1 year ago)
What if you have been paying for 20 years on a whole life policy?
You forgot timeshare
Rachel Hunter (1 year ago)
wow I totally got suckered into a whole life policy
bigboiswagg713 (1 month ago)
The only way for you to get your TAX FREE MONEY is if you cancelled thw policy or BORROW AGAINST YOUR OWN MONEY....what do I look like borrowing my own money..that I have to pay back with interest ....and if you die your beneficiary only gets the death benefit....not the cash value that you have accumulated..( HUMM WONDER WHERE ALL THAT MONEY GOES TO....OH YEAH BACK TO THE INSURANCE COMPANY)....so you paying for two things ( LIFE INSURANCE AND A SAVINGS ELEMENT) but you can only use one...that's like buying a pair of shoes and you either take the right or the left not both...use your brain son...btw that's why you have 3 ways of saving a Emergency...2-5 year short term and long term wealth building...use your head for more than just a hat rack..
Mark Maxwell (1 month ago)
His numbers are all off. Money in a whole life grows tax free and you can take our 90% of the cash value tax free. Any growth in an IRA or mutual fund, you pay income tax and a 10% penalty if you are under 59 1/2. Yes cash value takes time, you eventually get all your premiums back plus gains. JFK, Walt Disney both used Whole Life Policies to fund other investments.
bigboiswagg713 (1 month ago)
The reason you need life insurance when you're young is because you haven't built an estate so loss of income would be devastating to the family that's why you need 7 to 10 times more of your annual income. Now when you get older you don't need life insurance you need to have money retirement see most insurance companies believe that you will continue to say broke and not have enough money in case something happens in your old age. So money should be invested throughout time so that you can build wealth and gain assets this is why I educate people on why buying term and invest the difference so helping people making save money for retirement and other goals that they have is what I do if people are educated on the rules of winning how will they ever win. People make billions of dollars based upon the ignorance of others don't allow other people to make money off of you especially if they're lying to you.
Razine Johnson (2 months ago)
Jeff Thompson Jeff you will be very disappointed you know it whole life is the devil.
Luis Abiera (1 year ago)
Dave has been brainwashed
cdb48340 (1 year ago)
Thank you for the detailed answer!
No Name (1 year ago)
whole life = the devil
Electron Pusher (1 year ago)
What about building credit?
Athrough Z (1 year ago)
Electron Pusher I know the answer to this question, but I want to learn your opinion. What's the purpose of building credit?
Caleb Macias (1 year ago)
Dave please help me here. Can you make a video talking about Permanent vs whole? I'm looking at a policy that is a $1 million policy. There is no penalty or fee for taking money out and the growth is tax free. plus the policy has a history of 8% return. I have a pension already and am looking for an option for tax free dollars own retirement and my wife and I will probably not be able to contribute to our Roth IRA within the next couple of years. From what we've been told permanent is different than whole.....how so?
K Crishon (1 year ago)
Caleb Macias they are the same thing.....the permanent word is used to describe the price. tge price never changes and eventually you will own the policy making it permanent
26humor26 (1 year ago)
Life Insurance is only great when you get them when you are young and you have no health issues. My wife and I, we got our life insurance extremely cheap (in our early 20s) and enough to pay off our house if one of us passes away. Between both of us, we pay under $75.00/mo. I would never get a life insurance at my age now, 41. The monthly payments would be outrageous!!!
Nick Pallotta (26 days ago)
You choose your investment structure! Conservative, balanced or aggressive funds. If the markets are doing great your policies pays for itself...I wonder why Ramsey didnt mention that aspect.....
Naz Rahman (5 months ago)
what is the difference between universal life and whole life insurance ?
Jesseg0815 (1 year ago)
Same here. Got universal life when I was like 20 and pay around 53 bucks.
Deez Nuts (1 year ago)
Hi Dave, thank you for all you do. When you say to contribute 15% of income to a 401k plan, do you mean 15% total after employer matches, or just 15% coming out of my check only? My employer matches 100% of the first 5%, so do you mean for me to contribute just 10% plus the employers 5%, or do you mean I put 15% and then the employer puts the 5% which would put me at 20%? Thank you in advance for any help with this.
lovethemflowers (8 months ago)
-- In regards to that 5% bonus
lovethemflowers (8 months ago)
Or, "gravy on the biscuit", as Dave would say.
Duke Höber (1 year ago)
I'm doing my own 15%... For example, I have a 6% match so I am doing 6% in 401K and then the remaining 9% in a ROTH 401K.
Deez Nuts (1 year ago)
THANK YOU, SHAHARA! Sounds great. I always wondered this...
Shahara Roberts (1 year ago)
Dave recommends that YOU contribute 15%. That extra 5% from your employer is just a bonus!
Benton Tong (1 year ago)
The main benefit of whole life is that the policy does not end and does not go up in price. Forget the cash value aspect of it. Most people die from old age and most term policies don't pay out because it would have expired already. Most whole life policies are well under $50,000. Most people are broke and always are going to be broke and therefore need a whole life policy so when they die from old ago the family has some money to pay for funerals. The idea of saving money on term insurance and investing the savings in order to not need insurance in old retirement age is a great idea and great advice but realistically it simply does not work or happen for most people.
the one (26 days ago)
What was explained on the video is true. I see it over and over. Noooooooooooo to whole life
Nick Pallotta (26 days ago)
A great advisor can provide guidance for both life and investing....Dont bash whole or universal it has many benefits.
the one (28 days ago)
Dave Yttri (1 month ago)
Not true. Why does your company own it? I always get thought term was the best after I had gotten cv life, so I switched and now I have no life ins. Can't afford it
bigboiswagg713 (1 month ago)
Benton Tong ...when you are young you need a lot of coverage because the lost of income can be devastating to the family. Life insurance creates a immediate estate in case you die prematurely so that's why you need a lot of coverage when you're young because life insurance is not just to bury somebody it's to cover the income that was lost that is why you need 7 to 10 times your annual income when you get older you don't need life insurance you need money because you should have either invested and saved money throughout the years so that you don't need life insurance you have to have a retirement the reason people get sold on needing life insurance for their whole life is because insurance companies believe that you will stay broke and not be able to pay for your own expensive in case you die people are always taught how to pay bills but they were never taught how to build wealth and assets. So people need to know how to have money if they died too soon and how to have wealth in case they live too long y'all need to be educated
baxtermaxtor (1 year ago)
7:17 "I've never been poor, only broke. Being poor is a frame of mind. Being broke is only a temporary situation." - Mike Todd

Would you like to comment?

Join YouTube for a free account, or sign in if you are already a member.