This Is Why Universal Life Insurance Is CRAP!
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- Опубликовано: 13 сен 2024
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I am in my 40s and This is no time to reduce retirement savings. I want to max out my retirement funding and I also have another $200k in a savings account that i want to invest in a non-retirement account.Would it be better going to housing? Maybe own property and let it till im ready to move in at 65.
Research dividend millionaires and choose six to ten firms with over 25 years of dividend payments. Also consider working with an asset-manager to build a strong portfolio.
A good percentage of workers do not invest in the stock market because of lack of guidance. Every year you don't invest, you are falling behind. I’m hitting numbers in the stock market I used to dream of… now my dreams are getting bigger. Going from ($50k to $600k) is surreal all thanks to insights from a professional.
Mind if I ask you to recomend this particular coach you using their service?
Sonya Lee Mitchell is the fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
Thank you for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Just like Dave said about bank and insurance company buildings... my Mom told me "Look at how fancy that casino is? Do you think they built such an awesome looking building by giving money away?"
Ramsey solutions has a purdy building too
@@Mr_Fairdale The Ramsey Solutions Building is built with "God's Money". Dave is only the custodian of those funds. And like all churches, God needs "purdy buildings" 😁
@@macromancer Whatever you need to tell yourself
@@jakeleisure8326 yep, sad really.
@@brandijonewman365 sad indeed
Please learn about life insurance, I just finished taking insurance class and what you are saying is completely wrong. You are mixing insurance policies. Whole life policies dont go up over time and indexed universal life policies dont go up.
Dave is good for average people who dont believe in risks and take minimal risk..
Savvy people who want legacy wealth while alive and for family after death- take bigger risks
What I have understood about IUL is that it is not for everyone. It is expensive and needs time (at least 10-12 years) to build up your cash value. But if you can afford to pay minimum $500 every month for those many years (or even keep increasing your premium every 3-4 years) then this is not a bad policy. Also I was told that the Death benefit does include accumulation value. So it's not either or, your beneficiary gets both when you die.
The very fact that most people don't know anything about an IUL makes me think they're GOOD.
They are in fact, Good
IULs work, it’s a “rich man’s Roth” probably why he don’t want the word getting out.
The very fact that you said this; means you dont know any basic math 😂
@@christophergomez7200 Yeah alright Ramsey 🤣
Dave Ramsey is wrong…The key is having an IUL properly structured by someone you trust who isn't trying to give themselves a big commission.
Why should anyone trust insurance salesmen? Also, 99% of people don’t need a “financial advisor”, or let alone have pay commission to anyone.
Most people only average 2.1 % a year returns when they invest in their own. Maybe they should hire a professional.
Mad that the younger people are getting smart and older people not liking it
Life Insurance, 401K, Stocks, Bonds…eta.eta.. are tools. The value is in the strategy.
Dont leave all eggs in one basket. So everyone should have some life insurance. They talk like everyone is planning to put all savings into just life insurance..
Exactly. Sad so many people want to tear down a tool that has a purpose
Yes
@revanjg Agreed. But this tool is not recommended for the middle class folks. an IUL implodes on itself. Like they said, buy term and invest the rest.
@@revanjgthe tool is meant for life insurance not retirement savings
That’s a lie. Iul is better than Term. You are paid to say this. Do you have an insurance license?
I'm currently taking the Series 63 exam through FINRA and theres a section that defines what is and isn't a security. Guess what falls into the category of not.... Universal and whole life! I don't understand how it's legal for them to call it an investment
I has a very uneducated client claim to be a financial advisor. I knew that couldn’t be true. Turns out he sold life insurance.
Hey Michael IUL can have an flat interest rate of zero ,or one percent. That is why it is not an security. Securities can lose value.
*Keep in minding we’re not talking about surrenders fee nor inflation risk of the cash value.
I had a insurance agent tried to sell me a IUL, i said is it an investment and he went away from the question. It’s not an investment account so whole life and cash value agent talk like they’re financial planners and they’re not. It’s upsetting because they think I’m dumb and then can’t answer when i ask them about my risk factor and ROR.
Once you realize it's for the rich...they get breaks ...loopholes look deeper
its not legal for them to call it an invenstment
This is why Dave Ramsy isn't popular lol
If you watch closely, every single person who endorses universal life insurance is trying to sell you something. Every person who says it’s bad generally says regular term life is better and isn’t selling anything
And he doesn't even talk about the medical underwriting you have to go through for term.
They're selling term life, and there are plenty of Advisors, CPAs and attorneys who don't sell anything that recommend permanent life insurance. It is what the wealthy and big banks buy. They are smarter than Dave.
Term is more beneficial to insurance companies than whole life or UL. A term policy is a bet by the insurance company that you will outlive it. Then they keep the money and you get nothing back. There are also plenty of options with whole or UL. Like a paid up rider. Also after certain ages you will not be able to buy Term. Then you leave your family empty handed.
@@jrproducerseth6205 sounds like the pitch of an insurance salesman
💯💯
My son had a friend trying to get him to buy a whole life/cash value policy...gave him quotes for their term and cash value policies...I showed my son that if he just took the term policy and put the difference under his mattress, that he would have way more money than the cash value policy would have plus the only way to get the money was to borrow it!!😱 And if he died they'd only get the face value of the policy, not any of the savings! Term on the other hand would give the face value plus all the money under the mattress...more if the money had been invested in a good mutual fund! The moral of the story is to buy term insurance and invest the difference in a good mutual fund!👍🤠
Why waste money on term insurance when your job company has group life insurance for you? Ok you dont get it if you lost your job with them but would get new life insurance for the new company. If you dont have a job, you cant afford anything anyways.
@@ychongy you can get ROP Term, so after your policy is up you get your money back. Obviously the monthly premium is higher but you can get some peace of mind and your money back.
Rather what I was thinking as well. Especially the point where you have to take a loan against the money you pay into the policy to create the investment portion. Give them your money, pay fees for them to take it and invest it....pay them a fee to borrow against it. Insurance companies make sure they make their money first.
@@ychongy Usually the group policy is no where near the coverage you need to provide for your family...burial maybe...💸
@@ychongy
What about your work doesn’t offer insurance?
“Some buddy from college all of sudden remembers you…”- basically. Lmao
Oh hey 'MLM dude', I don't have time to speak with you. Bye.
He’s explaining what happens when you have a poorly structured IUL & and uneducated broker. Also even with a poorly structured policy it would take 30 yrs to lapse. I could bet my life savings these guys have never seen one structured properly
By all means, structure one here for all of us to see.
He is pitching term life insurance. He sells his show as a lead for term life agents.
He endorses a product he likes....so?
If an insurance agent tells you that IUL will make you rich, he is lying to you. IUL is designed to protect your money! it is a backup plan that allows you to invest the rest of your money with more confidence because you have a plan B. Please guys, do not paint IUL as a scam. it is a great tool if it is sold with proper expectations.
Why IULs are garbage:
1. Money never enters the market - With an IUL, the money funding the cash value portion of the policy is never actually invested into the market. Instead, the insurer holds your “cash” and pays a return on the annual growth of a specific index. Anyone selling IUL are not required to have a securities lIC.
2. Growth potential is capped - While most policies have a “floor” of 0% which prevents your cash value from dipping below what you put into it, your growth potential is capped, too. For example, if your policy limits growth to 10% on the index and that index out-performs that percentage, you’ll still only receive the value of 10% in your account. The insurer keeps the difference.
3. No dividends - Dividends are completely eliminated in an IUL policy. Not having the chance to reinvest any earned dividends, as you could choose to do with an individual investment, means you could miss out on a great deal of money from dollar-cost averaging over time.
4. Fees, fees and more fees - IUL policies are packed with fees and charges that will eat into any cash value accrued.
5. Rising costs - The internal cost of insurance continues to rise as you age, which can limit the amount of money going toward any potential cash value. All universal life is A.R.T ( annual renewable term) PLUS: Almost all cash value policies have these “features” built in. • You’ll accumulate NOTHING in cash value for the first few years the policy is in force. • The cash value earns a lower rate of return (often just 2%-4%) than the potential return you could achieve if you put your money into a vehicle such as a Roth IRA in the U.S. • If you borrow from the cash value, you’ll pay it back plus interest. • If you die with the policy in force, beneficiaries receive the death benefit (less any outstanding cash value loan balance) while the insurer keeps any accrued cash value. Unless you have the increasing death benefit option (option b) the consumer will pay more for that option. The consumer always gets screwed when investing in these policies. The only winners are the agent and the company. The BS I hear all the time is it has to be "structured properly." I have collected 64 policies in the last year and I haven't I seen one structured properly.
First mistake - if you purchase an option B increasing death benefit, then it equals face value plus cash value at death.
Second mistake- term insurance will end after 15 or 20 or 30 years…right when you need it! UL is permanent insurance and its costs more because it will be there so long as you want to pay the premium. Also, it is good for legacy building because the death benefits are tax free!
Dave- stop being so one sided and admit there are good reasons to have permanent universal life type insurance!
Why do you need insurance benefit in 20 or 30 years? If you've been smart you've been taking the hundreds of dollars a month wasted on whole life and actually investing it. In 20 or 30 years your dependents are grown and you should already have a comfortable retirement savings to leave to your spouse.
@@Lon1001 thought the goal was to leave money for your family, including kids! No matter how old there old and won’t it be better to leave them as much money as possible?
Universal life insurance is not permanent. Eventually the cost of your premium will eat up all that money you thought you were saving. My own agent even showed me at what age my policy was projected to lapse should I continue just paying the bare minimum.
My father had a UL policy too. It lapsed 18 months before he died. To continue paying the premiums through to his death would have cost a quarter of the death benefit.
I'll do my "legacy building" through my investments thank you very much. The math actually computes.
@@reese85 Yeah, leave them your 401k and IRA money you didnt use. Why pay an insurance company to save it for you>?
@@donjohnson1416 because most people don't save. There are other products like a paid up whole life. It becomes paid up in a certain amount of time that you keep till you die.
Stay away from any "Advisor" who says always and never when it comes to financial tools. Usually the problem they have with them is either they, nor their sponsors offer those products. Dave Ramsey is case in point.
All tools are useful in some situations but none are useful in all situations.
The "stay away from these twisted people" is the only safe "always" when it comes to finance.
Their explanation, here exhibits their simpleton knowledge of these products.
How did you build your big headquarters in Franklin, TN Dave? If we should hate other companies for this, why not you?
So dumb.
He built that building by selling actual products and services that help ordinary people. Not just trying to sell something to earn constant commissions that takes advantage of the buyer. Most people are financially illiterate and Dave knows that so that’s why his advice is more always or never. It’s about building discipline and good money habits for many that never had them.
Exactly. He’s close minded .
Radio, podcast, media people who think they know everything just crack me up. Dave is no different.
Amen. Great response
@@c2s2942iul is a product hun
“Banks and Life Insurance companies screwing you” 😂 sounds about right
and you have at least one of them don't you ?... 🤣
I'm going to start a show and give advice on topics I know nothing about too
Says the life insurance salesman
I’ve never seen something so mischaracterized in my life. He is saying how bad IUL is without ANY real specific reasons. 👎🏼
@@astroman30um what is wrong with making money selling something you actually believe in? We have to eat just like you. It doesn't mean that we are selling you something we know is not good for you. If the policy is designed properly, then it is a great product to have.
@@lemarcusbrown1708
1. After I’ve been with a major LI company for years, you and I both know it’s a bad product.
2. ULs, IULs, VULs are worse than whole life policies. Trash value insurance is never a good purchase.
3. I get tired of hearing BS phrases like “properly structure” “net death benefit” and “equity.” These are words that lying insurance agents use to steal money.
@@rukiddingmeNJwell he does give specific reasons, but it reflects his extraordinary lack of understanding and sophistication… I find it so hard to believe that so many people listen to him… arrogant, overconfident about things he seems to know little to nothing about. ULI can have a role in a balanced portfolio for some investors…. You have to understand the product though
the point that this video makes should be required in all high schools starting in 9th grade and should be put the way you just put it sir. thanks for what you do.
This is an overgeneralization by Ramsey, he's not licensed so he hides his bad advice behind being an "entertainer".
@@danielschachle2054 how long have you been selling insurance?
4:43 that's exactly how I ended up being sold whole life. After finding Dave's videos, I got out of it though
Why cancel after one video? Dave says one thing, someone else says another.
Whole life isn’t index universal life these dudes confusing yall
I disagree with Dave respectful. First Depending on the UL policy you get it may ,or may not come with an cash value. Essential you are buying longer term life policy. In addition UL give you the flexibility to increase the death benefit later in life ,or lower it.
Dave is wrong by saying term is the only life policy to buy. As we get older term gets excessively expressive ,and Universal life are traditional more affordable. Definitely talk to an ethical licensed insurance agent ,but it is situational. One does not fit at all 👍.
If you max out the account it will pay for itself and you can borrow against the overall value, three consecutive years, to access the death benefit while still alive!!! Each year the policy resets after a loan and you can take out another loan until the cash+death benefit value is depleted, if you choose to do this; but smarter if one would use it as a bank and pay back the loans after investing in appreciating assets and realizing the returns. Incorporate a trust that stipulates how distributions are to be taken and that policies are issued for any family members that are born with the death benefits added to the estate. This is how the Rockefellas and every other wealthy family established generational wealth.
So, you upfront large payments to build up your CV and pay the LI company interest to BORROW against your own money? Rocefeller's lived during a time when very few banks loaned out money. Besides, they got rich from Real Estate and other investments, not trash value insurance. I like what Warren Buffett does is to purchase existing WL policies from old people for pennies on the dollar and cash them in when they croak. Brilliant.
What's "investing in appreciating assets and realizing the returns.
As any true insurance professional would advice. There are some insurance products that are good for some but obviously not for everyone. Obvious it is wise to always do your homework before purchasing anything. Since people all have different situations there is alot to consider. Insurance agents with integrity are worth seeking out. They can add value to ones situation when placed in the correct insurance product.
100%
Definitely true. Just getting into this business and I am seeing the ethics of some pretty good agents and some not pretty good agents. Spot on 👍🏾
advise*
Would you rather listen to an insurance professional, who gets large commissions on selling you a whole life policy(and even larger on IULs), or a financial professional, who tells you that whole life policies are a Rip off? 🤔
@@thepleasants2795, you clearly don't know what you are talking about. Most whole-life products are sold to broke people living on Social Security as a final expense product. The commissions are small on those are small, and the clients are a nightmare because they miss payments and need help managing money.
Financial professionals make a 1-2% commission on your money each year, no matter how they perform. Most of them cannot beat the market. Financial professionals are incentivized to lie and tell people not to take money from their accounts and bring it elsewhere with no downside risk and market returns.
Most financial professionals will tell you to draw down 4% from your nest egg each year, while annuities offer 7% annual payouts guaranteed for life and 20% bonuses on the total contributed to boost income further. Do the math, say the market returns 8 percent, but the costs are 2 percent for fees, and 25 percent goes to income tax, leaving a net gain of 4.5 percent on average year. What about down years or clients that have diversified into safer products like bonds or money market accounts? Even if someone can help grow your money, there are better places at or near retirement.
When they retire, most people cannot handle the risk of variable products. Look at 2000-2012; they call it the lost decade for a reason. People are not ready for a 30-40% market correction that are retired or getting close to it.
When I was in my early twenties I learned that whole life insurance was a bad idea, for all the same reasons Dave always talks about. I’m 66 now. I got an inexpensive term policy when I got married and had children. I can’t believe people still fall for this whole life scam.
I’m surprised at 66 you found term insurance for cheap as insurance premiums is based on health and age. Cheaper than a IUL. But say you outlive that term policy, you lose what you put in and don’t get any death benefit. Yes IULs build cash value, but they also ensure insurance on your life forever compared to a max 30 year term. Some IULs have a return of premium option but most term don’t
@@SS-rm9cw I got the 20 year level term policy twenty years ago when I was 46. It just expired a month ago. I get offers for term insurance in the mail now but they’re crazy expensive. I don’t need it , I no longer have dependents. My wife passed away 15 years ago and my kids are all grown.
I believe that this is a hypothetical rant
Never seen someone talk so much and have so little knowledge on this. Dave should be sued for this misinformation. So many variables he doesn’t even cover
Such as...?
The bottom line is that you are never totally covered by any insurance policy. You would be better off putting the premium money in a mutual fund.
That is correct 👌 most people think they will be rich after they die and I think life insurance is a big scam 🤔
Uil can be extremely useful for tax basis and funding your own investments for the future you don’t necessarily need to use an insurance as an asset protection
It's called "IUL." And it's garbage with all the high fees/commissions and capped gains.
Nothing like Dave reacting to Tik Tok in the morning 🤣💀
and 401ks screwing you as well who do you think owns them ??? BANKS!!!!!! tadAAAAA!!
I’m so confused. I’m studying for my life exam and it says that in universal life the specified amount is the death benefit plus cash value in the account… but you guys are saying the opposite?
So am I and these guys are shutting it all down I’m reading endless comments to really try to see if this is something I should do.
They are wrong. They’re mixing up policy types. Your research for the exam should prove that
Yep. Sounds pretty much like whole life. When my mom passed all they paid out was face value. They didn’t pay out what she saved in it. That’s what they called her “cash out value” if she closed out her life insurance. Whole/universal life policy agents hate me because I will steer people away from their bs.
Whole life policies have in essence two parts. One is decreasing term insurance and the other is a "savings" portion. If one dies the day after the policy is purchased the death benefit is entirely from the insurance company. On the other hand, if one dies at 90 the death benefit will almost entirely be from the "savings" part. The cash value is the money one gets if one cashes in the policy. If one dies say at 60 with a policy contracted at age 35, the death benefit will be some combination of insurance payout and the savings part to make up at least the face value of the policy. What many think, and Dave often implies, is that one should get the entire face amount PLUS the savings part which would being having your cake and eating it too. The reason one can have an in force insurance policy at 85, 90, or 95 is that the death benefit is comings from the "savings" portion NOT the insurance part. That vast majority of term life policies never pay out anything (because the term runs out or they are dropped); that is why term is is cheaper.
The reply to this comment has more value than the video. Misrepresenting another product or entity for the purpose of making money is typically an illegal action or at least a reflection of ethical behavior.
Good
Thought that was only for whole life. Universal life is suppose to pay out both because you are paying more into it for the investment side?
@@ychongy universal life gives two options, either the face value or the cash accumulation. The Indexed Universal Life gives both the cash value and the death benefit.
Dave has done a great deal in helping people get out of debt. Thats his target market. The upper clients have different types of advisors and they use Permanent policies in bunches for different reasons that this space isn't enough to elaborate. The wealthy don't listen to Ramsay. Now the real question is, Are you going to become financially independent following who's advise? The one from broke mentality or the one from wealth mentality. JC Penny, Walt Disney, Ray Kroc (McDonalds) They all used permanent policies to support their businesses. Maybe Dave should talk about why. Also he should remain teaching people how to get out of debt. That way he don't taint his name by spreading misinformation.
"..this space isn't enough to elaborate." Did you seriously just type that bullshit? You have ALL THE ROOM IN THE WORLD to type a retort. Yet, you know Dave is right. "JC Penny, Walt Disney, Ray Kroc (McDonalds) They all used permanent policies." These folks got rich from their products, NOT FROM INVESTING IN TRASH VALUE INSURANCVE. They lived during a time when very few banks loaned out money. Try harder.
Could you tell me how UIL helps a middle income person get to rich/wealthy?
@@CCTENG2022 It can help a middle income person get wealthy by giving them access to loans at a flat rate (around 4.5%) if you're looking to invest that money or help them build their retirement account without the risk of losing money like 401k or Roth IRA
@@CCTENG2022 Check out books or videos by David McKnight, Doug Andrew, James Stoddard Jr., Patrick Kelly on the topic.
The key is diversification! Do not put your eggs in one basket alone. Learn for yourself from different experts and be empowered to be your own money managers. Gather the positives of each experts. I would rather have a multi-functional solution and the most powerful financial tools ever designed than not having one at all! 😊
These are sick people spreading bad information.
How can I explain to my 73 years old Dad to just buy Term and invest the difference ?
Tell them that the insurance company keeps their cash value if they don't cancel it.
your case is a different one... not a lot of insurance companies will sell term life to a 73 years old male (because you know the chance that they need to pay is high)... or at a very high cost. So if your Dad have whole life already, just keep it.
So cash out now?
Would you take financial securities advice from an investor who hasn't been educated in the field since there certifications and licenses expired in 1996? Would you trust and believe in their knowledge enough to invest your money where they think it should go? My guess is HELL NO! Yes, a person can hold certifications in both of these fields. However, that is not the case here. Dave has not been in the insurance industry in 30 years! Things have changed since then. Get the CORRECT information from those who are licensed, certified, trained and educated in the insurance field, the companies and the products.
You don't need a licensed plumber to know what's inside the septic tank. Trash value insurance is a scam. You're just pushing this garbage because you sell it.
80 percent of index policys are stable rates. That never change. My clients pay the rate pay and it never changes
IULs are garbage with high fees/commissions and capped gains. The ART (annual renewable term) eats away the cash value. What a shame you scammed people into buying this nonsense. You do it for commissions. POS salesman.
The premiums may stay level but the amount taken out for insurance out of that premium goes up every month.
The accumulation in the UL has a beneficiary and the money goes to whoever you put as the beneficiary… at least with the insurance companies we work with
ULs are garbage with high fees/commissions. The ART (annual renewable term) and expenses eats away the cash value leaving customer to pay out of pocket to cover the term. Scam.
Buy term and invest the difference works on paper. Then life happens. People spend the difference. Then they reach an age where their term insurance has expired and they no longer qualify for or can no longer afford life insurance. There’s a place for term. There’s a place for Universal.
Bullshit.....trash value insurance is a scam. You like it because you sell this garbage.
IUL is a good investment tool for high income earners because they cannot invest in Roth IRAs nor get a tax deduction for a Traditional IRA. Also, IUL is a good tool for your 3-6 month emergency fund. All while protecting your family in the event you die. Uncle Dave is not telling the whole story.
High income earners have a much greater menu of investments to choose from while building real wealth. I was one, retired now and don't have any insurance - but sizeable wealth to weather any storm.
Why IULs are garbage (from an actual fiduciary :)
1. Money never enters the market - With an IUL, the money funding the cash value portion of the policy is never actually invested into the market. Instead, the insurer holds your “cash” and pays a return on the annual growth of a specific index. Anyone selling IUL are not required to have a securities lIC.
2. Growth potential is capped - While most policies have a “floor” of 0% which prevents your cash value from dipping below what you put into it, your growth potential is capped, too. For example, if your policy limits growth to 10% on the index and that index out-performs that percentage, you’ll still only receive the value of 10% in your account. The insurer keeps the difference.
3. No dividends - Dividends are completely eliminated in an IUL policy. Not having the chance to reinvest any earned dividends, as you could choose to do with an individual investment, means you could miss out on a great deal of money from dollar-cost averaging over time.
4. Fees, fees and more fees - IUL policies are packed with fees and charges that will eat into any cash value accrued.
5. Rising costs - The internal cost of insurance continues to rise as you age, which can limit the amount of money going toward any potential cash value. All universal life is A.R.T ( annual renewable term) PLUS: Almost all cash value policies have these “features” built in. • You’ll accumulate NOTHING in cash value for the first few years the policy is in force. • The cash value earns a lower rate of return (often just 2%-4%) than the potential return you could achieve if you put your money into a vehicle such as a Roth IRA in the U.S. • If you borrow from the cash value, you’ll pay it back plus interest. • If you die with the policy in force, beneficiaries receive the death benefit (less any outstanding cash value loan balance) while the insurer keeps any accrued cash value. Unless you have the increasing death benefit option (option b) the consumer will pay more for that option. The consumer always gets screwed when investing in these policies. The only winners are the agent and the company. The BS I hear all the time is it has to be "structured properly." I have collected 64 policies in the last year and I haven't I seen one structured properly.
Dave Should have David McKnight on his show to actually talk to a professional about the IUL and how it works. Because dave does not know what he is talking about.
ever notice the only people who like IUL’s are the ones who sell it? If they were so great wouldn’t every financial person sell IUL make multiples of what they make currently. They don’t because they have ethics/morals and don’t want to sell clients a far inferior product like IUL
I just want Dave to explain the infinite banking concept.
He won't waste his time trying to because it's a bunch of convoluted words meant to confuse people into thinking it is useful. You can't become your own banker because you don't have the access to free money. Infinite banking is simply paying an insurance company high rates for you to take your own money from your back pocket to your front one.
My friend your all wrong and don't have a clue only if you knew the truth you are truly missing out on something that would change your life but you have been blinded seek full knowledge and understanding then speak about a IUL
@@Lon1001 this is very false, infinite banking is a great concept
Infinite banking is when you use your life insurance as collateral to take a loan. It functions most optimally the greater the returns your cash value are getting relative to the interest of your loan. If you have 200k cash value in your life insurance policy and it’s getting 8% returns, it’s better to take out a loan at five percent interest than to use your cash value.
That is what happened to me. Paid faithfully for years and it finally became valueless.
Sorry to hear. Did you have a whole life policy?
@@maryhorwitz845 It was Universal Life. I cashed it in about a year ago, as the cash value and death benefit were decreasing every month. I had no more reason for death benefit protection anyway. I’m single, no debt or minor children.
@@jeffnunes9780 how does that work? I thought universal life was more expensive because you paid more monthly so the extra gets invested to either save your policy or in a great world make more on top of face value?
It happens when a bad agent sells you a policy at the minimum monthly needed instead of the appropriate monthly needed to keep the iul in good standing
@@ychongy the cash value of a universal policy starts to decrease extremely quickly due to the increasing cost of insurance each year if you are investing try universal if you're looking for protection try whole life or term
Dave is Right once you die you don’t keep the saving you get the face value of the policy 😂 kinda sucks not sure why people think this a smart idea
The reason you get the face value is because it's more than the cash value. Do you want less instead?
Thought that was only for whole life. Universal life is suppose to pay out both because you are paying more into it for the investment side?
@@jrproducerseth6205 "You" don't get anything. The beneficiaries get the DB. "You" lost money because the LI company keeps it.
@@jrproducerseth6205Your thinking makes zero sense. Why would you be okay putting your hard earned cash into a life insurance product and not be paid the face value + the savings you put in when the insured experiences death???
I have a bridge to sell you!
@@Lionheart_He-Manyour money grows 4-13% every month. Your loved one gets a huge check. Sounds like a win to me.
If you're using a universal life insurance to invest your money I think there's better options.
but if you're using universal life insurance for the death benefit then that's where the fees are worth the cost.
Life insurance is very important for everyone.
It's not if you die but when, we all get a turn that's a fact.
I got sold in index universal life insurance policy while I was attending a meeting for a MLM company in Southern California. Fast forward eight years and due to missed automatic quarterly payments my account was closed without even a phone call. My address had changed, therefore never received any mail. Had the company sent anything. The way the index universal life policy was explained to me was in about 10 years it would be self funding and they would recommend beginning to over fund around that point. Yesterday I ran into a vice president of a competitor company for the one that I was sold a policy from and they Explained how an Iul works behind the scenes to me. Now here I am
Sorry that you got scammed.
listen to this man and you will forever be average at most
Says the insurance salesman.
100%!
@@astroman30you replying to everyone trying to convince yourself Dave knows what he is talking about I done seen you on almost every comment on here. 🤣🤣🤣
@@DaRealRari Shut up Dan. Get out of your mama's basement and get a job.
@astroman it has nothing to do with being intelligent. The word choice I used is intentional. Most people know that ccuniversal life, whole life, and indexed universal life are completely different. A closed mind does not grow.
It's all trash value insurance. Just let me perpulate my congongulate of what the system of the formulate to bibbity bobbity boo.
There is a reason rich people have LIRP's(Rich Person Roth). Maybe if you thought differently, you might see an advantage for these. Has anyone on this post that is commenting against it, done any research to find out why it might be good for investment vs just for life insurance? Just saying, stop thinking and start researching.
BORROWING against your own money, and you think this is a good idea? No, Sport, I can't think of one reason why trash value insurance would be a good investment.
@@astroman30 oh wow great point, you need to get this info out to all the rich people that use this. There is a reason it is call The Rich Mans Roth. But you and Dave keep saying what you say and then those that use it for the positives will continue to use it for those reasons and hold on to our money.
@@jackk09 Unless you're a billionaire who needs to pass assets along to heirs, no need for this garbage. Do your homework.
@@astroman30 ha ha ok
@@astroman30fr homie acting like hes bill gates😆
because everyone dies, unlike insurance for other things in which they might not have to pay anything out, in order for them to make money they must pay out less than you give them
Not true at all, I won’t pay anywhere close to the amount my policy is worth.
Soory to say Dave is wrong. With an IUL the way it gets structured, what you pay for your insurance actually goes more goes towards your savings. When the person dies, death benefit and cash value with its interest goes to beneficiaries' tax-free. Dave is right about the banks pulling a fast one, the banks invest their money in life insurance assets . Look it up
Also at .59 secs dave starts to tell the truth.. TERM life increases they prices. lol😅
Then he fixed it for the video.
I recommend looking for the video where someone picks at every wrong part of this video .
Older folks taught us to stay at a job for 40 to 50 yrs to be set in life.
The younger folks are teaching us they jump every 2 to 3 yrs from jobs to actually increase their salaries
Everything has a purpose. Sigh. Many people on here hating on insurance companies and banks... And speak from partial knowledge or none at all. If a VUL is all you have and expect to safeguard your future... Yes you will be disappointed. Diversify.
Nobody gets Rich helping people
The only get rich helping themselves
If you're able to invest more than government tax-free investment warranties like 401K, then IUL can be used to shield your money from taxes.
Otherwise, 401K and similar products remain more valuable investments for middle-income earners. UIL caters to wealthier individuals capable of investing beyond the limits of a 401K government allowance.
It's called, "IUL." At least try to get it the letters correct with your bad advice.
@@astroman30
Thank you. I did the correction, but not sure what was my bad advice.
I dont think it is cookie cutter, I have different vehicles/accounts for different uses. I have whole life, IULs and term.
What a stupid way to lose money.
Well it remains to be seen if it is stupid. I'm doing pretty good as of now. You keep putting your money in these banks and viagra/cialis accounts.
@@deuceknowledge4500 What part of “The insurance company keeps your cash value” do you not understand?
@@astroman30 just told on yourself , wish you the best of luck with your business practices and endeavors.
@@deuceknowledge4500 Told on myself?? You mean, I told the truth. Do you not believe the LI company keeps your cash value? Your level of stupidness is astounding.
Within this video, universal life, index universal life, and various term life insurance programs is covered that perpetuates the confusion within the market. Universal Life and Index Universal Life are two different programs. Term Life insurance has various aspects (e.g. renewable, decreasing, level, etc.). I will stand by and wait for anyone in the Ramsey ecosystem to explain where you can invest within the market and have zero exposure to market volatility and principal protection.
"programs is covered that perpetuates the confusion within the market." Huh? You remind me of Damon Wayans on In Living Color trying to come up with words he made up to sound intelligent.
Index universal life has cash value that is how they sell it and they spin it opposite of what you’re saying, term is a rip off. It’s for the short term. People saying it isn’t want you to invest with them. Just understand how money works and diversify. Learn as much as possible. I don’t believe anyone. I’ll learn for myself. Sheesh.
Your premium is locked for 20 years.. So if you max fund without going over what's allowed you can either use some of the cash value as loans to avoid taxes or surrender the policy for the full amount. The only issue I see is that they make it seem like the money is some how protected but that's not 100 percent true.. you can lose everything if the market were to crash aperantly.
I'd rather stick money under a mattress than to buy a trash value policy.
I actually agreed with this until they started talking about whole life and universal life like they are the same product, which is a very common mistake with people that trash whole life. While whole life and Universal life policy's are both "permanent" insurance, they are completely different. Dave actually explains Universal life pretty well with his two different components concept.
Nah.....they're both garbage. Mr. "net present value" Paulie.
@@astroman30 Depends on what your looking for I guess
Thought the same. They dont work the same.
Permanent is whole life...All policies are whole life except for Term
@@NIKKIMarie119 That is not true. Whole life and the UL products are completely different forms of permanent insurance.
Most of this is correct. However he fails to mention the amount at risk which reduces insurances charges within the policy. And he also failed to mention a type B death benefit which pays the face amount plus any cash value.
"Amount at risk?" please, elaborate. A Plan B would require a PUA or raised premium, still a bad idea. Trash value insurance is a scam.
Amount at risk is the difference between the death benefit and the cash value. In an IUL, the internal cost of insurance is based off the amount at risk. The insurance company doesn’t charge you for the entire death benefit, but rather the difference between the death benefit and the cash value.
Type B death benefit doesn’t need PÚA or raised premium. PUA isn’t even an option for an IUL. PUA is only available on policies that pay dividends which would be whole life policies. IUL policies don’t pay dividends. What type B death benefit does is add the cash value to the face amount. This increases the death benefit of the policy by what the cash value is
@@DjFurrySTL By all means, show me your carrier offering a Plan B without a raised premium. Why would you never want a Plan B option if there is no raised premium? You left out the ART that eats into the CV eventually leaving customer out of pocket expenses to cover the term portion. Actually, ULs, IULs, VULs are all worse than WL which is a bad product within itself. BTID is a way better method than any trash value product out there. You just like it because you sell this garbage ripping off people.
@@DjFurrySTL "scheduling"
@@astroman30scheduling?
Thomas Mark Moore Brenda Hernandez Brenda
It's funny how Dave and this guy are complaining about the fees and commissions on these life insurance policies yet Dave is always advocating for people to buy into loaded mutual funds that are actively managed and charge a 5.75% commission. Most people would be better off just buying term life insurance just like most people would be better off buying into a no-load index fund.
What part of "The insurance company keeps your cash value" do you not understand?
@astroman30 Clearly, my comment went right over your head.
@@AK-47ISTHEWAY clearly. You don’t what wtf you’re talking about
@astroman30 Clearly, you can't read. Dave is a hypocrite. Yes, Whole Life and Universal Life is a rip-off, but so is buying into actively managed mutual funds that charge a front-end sales load. The only reason he is recommending people use one of his "SmartVestor Pros" is because he gets a kickback.
Invest in what? Mutual funds? Paying 3-5% management fees that eat up 2/3 of your total growth to have ALL of your money at risk in the market. Also... it is an option to also have your savings ADDED to the death benefit.
ULs are worse than whole life. The ever increasing term (A.R.T.) eats up the cash value leaving you to pay out of pocket. Oh sure, you go for option B that would require you to purchase a PUA to an ever increasing term. Scam.
You sell life insurance 😂?
@@blinks6736 yes
The only known investment account that yields a minimum 5% interest rate yearly no matter how the stock market does. An account that lets you withdraw from your cash surrender value at no fee or penalty while still entitledto your entire death benefit. Im sorry Dave but I'll have to go against ya this time. I think you'd have to be an idiot not to love this account
Pay an insurance company 8% interest to BORROW against your own money, and you think this is a good idea?
@@astroman30 Actually paying 4-6% and receiving avg 7-12%. The beauty is that you do not need to pay back the loan if you don’t want to. It just deduct from the death benefits
So what's is the best?
term
I completely agree that UL is sold way too much to the wrong people. However, so many things DR says in this video are so incorrect that as a Financial Advisor, I'd be embarrassed if some of my highly respected peers heard me say all what DR is saying.
By all means, Mr. Salesman, tell us where Dave is wrong. We want to learn.
@@astroman30 I don't sell life insurance although I know how it works
@@CareyVandenberg Tell us where he is "wrong," Mr. Wealth.
I don’t get it because mines never goes up and stays the same monthly every month
but see your cash values grow year by year, keep up the good job. u will not regret it.
what if you just use a universal life insurance plan as a tax shelter to loan money out against the policy (tax free) and continually drain your holdings... is this still as stupid? Pay for the policy instead of taxes on that money which would be much more?
BORROWING against your own money only for the insurance company to charge you interest to BORROW against your own money, and you think this is a good idea?
@@astroman30 what interest? there are many ways to structure this and Ramsay is dismissing nuance and dismissing the many accounts of success despite the obvious slimy nature of any aspect of the financial industry.
@@charleshaycockcomedy Did you not know the LI company charges you interest to borrow against your CV? Stop giving advice if you don’t know how trash value insurance operates.
@@astroman30 my point is, what interest rates are you looking at under what structure, plan, and company; and does that still negate the point I made of using the policy to leverage tax breaks instead of using it as actual insurance. I don't remember giving anyone advice or telling anyone what to do...
@@charleshaycockcomedy you offered no advice. He's Just another opinion siding with one view on the video. Real constructive eh?
I love it, Dave. I'm an agent but I always push term lol
So term is better than whole? But when the term ends, what should we do?
@@reese85 when the term ends you're locked in on a higher premium because you're older, you may not be insurable at that point as well. But if you're relatively young, you should qualify for a 30 year term. Dave recommends buying term and investing the difference because term is way more affordable than whole life. Investing the difference in good mutual funds or your retirement fund (401k) is a better investment in the long run. Less commissions in the agents pocket and more in your retirement
@@guitarwok but why buy anything when your job company already has group life insurance to cover your family if you die? If you lose ur job and dont get their life insurance anymore, you wont be able to afford any type of life insurance anyways. Until you move to the next company to get their group life insurance. 🤷
@@ychongyassuming the average person does this, if they die between jobs, this means they leave any dependents without an inheritance or money to replace their income, repay debts or pay off a mortgage. Tough.
I hope you also sell whole/permanent. Otherwise you’re betting for an early death.
Its the same as VUL its a scam
it pays more than the face value. that is something Dave gets wrong often. I don't like the product but to say only the face value pays is false.
Unless you purchase Option B through a PUA, you only get face value. Scam.
Seems like everything's a Gamble. Need to focus on how to grow your money without stupid risk. Save save and get out of debt, slow growth better than losing everything making someone else's rich.
Wow, this is such a smart opinion from these individuals (...NOT) Seems like this gentlemen prefer to save cash under the mattress and if you are the provider of the household leave nothing behind to you loved ones but liabilities such as your home mortgage. IMHO these guys are way too emotional about it to be trusted. Feels like a view/like trap.
So how long have you been selling IUL policies?
@@brycehoener5610 Financial Educator. Solution must be focused on the individual needs. There is no copy/paste recipe for all people. If you have a estate, and you are finance savvy, there are many options. If you do not have a estate and not finance savvy, there are not too many options. Dave wants to apply his high-level and articulated advice across the board. In reality, executing such advice is not feasible for everyone, not even for people with degrees in finance, economy or similar. Don't forget is the "The Ramsey SHOW", not "The Ramsey Licensed Financial Advice". Show business is view/like count. Advise from a Licensed professional business is customer success.
@@edwinmb You don't need a licensed plumber to know what's inside the septic tank. Try harder.
Robinson Robert Lewis Kevin Garcia William
Insurance agents make less commission when they write a universal life policy vs a term life policy
They must be with the wrong carrier. We made waaaayyyyyy more money selling ULs than term.
How do you fix this issue if you get a stupid whole life 🤦🏻♀️🤦🏻♀️🤦🏻♀️
Cash it in...buy term.
Invest in what doe?
There’s still benefit for permanent life to give beneficiaries to cover funeral costs and other legal fees right away rather than having them to pay out of pocket until your estate is settled. Of course you should supplement with term life for bigger coverage during those years you have dependents on your income.
A term policy would still pay out directly to the beneficiaries. No need for it to go to through probate which is what I assume you mean unless there was some sort of issue.
I know buy term and invest is the way to go and I have a strong resistance to place my business with any company that provides these IUL and whole life policies...Is there a company out there that ONLY provides term life insurance and none of the cash combo stuff? I can't condone an agent that can do buy term and invest and also provide to their client IUL.
Primerica. Buy term and invest since 1977. Also new term products released are extremely competitive in price and feels good doing business with a company that stays true to this concept and doesn’t sell out like other insurance companies
Yeah but soon as you sell your investment you lose half from taxes in a IUL ITS TAX FREE
What if you out live your term policy?
@@HolisticlyMiraB first, I'd be thrilled as heck that I'm still alive! Best problem ever 😅😁... I'd be self insured by then, with money accumulated from the "invest the difference" part of the equation. And it won't be death benefit cash, as in I can use it while I'm alive.
Thanks
I’ve had every type of agent show me and mathematically buying term and investing into mutual funds that average 9-12% is better
Life insurance is useful if have little to no assets and dependents. That way it can help insure the care of those that used to depend on you by someone else. To use insurance as a financial tool while living seems backwards.
Except term does the exact same thing, only much cheaper and better. Using it as a financial tool is literally the only "benefit" of whole life, and that's inferior to just saving & investing the difference.
@@ghjong001 100 - 20% = 80. 80 + 20% = 96. Beware of Dave's advice.
@@ghjong001 but your job company also has group life insurance to cover your family if you die? So the point is?
@3:33 he again shits on the insurance world that he himself makes millions from... HIS TERM policies are almost never pay out. so whos the bad guy,,,? if the term coverage never pays out, the company keeps the money. This should be criminal when people that understand something intentionally mislead others.
Carole brooks flat 1/40 leopold rd Felixstowe ip11 7 np worked in life insurance and done a lot of the elderly out of there life savings she has the cash stashed somewhere but where all her companies she worked for are now bankrupt/ get justice for her elderly victims/
They are like a bunch of angry Primerica agents lol!!!
That’s what I was thinking lol
Researching becoming insurance agent, once do well in that Series 64,65. I told them no Whole life refuse to sell those. IUL backed by S&P500 QQQ.
IULs are garbage with high fees/commissions and capped gains.
@@astroman30 Explains why If sell I get 1k-1800 Commision
The best way it seems to handle life insurance is through the company you work for. Most offer free 25k policy. Sure it’s nothing.
It doesn’t cost much to have extra coverage. The strategy is that so long as younger employers are buying into the insurance coverage then the insurance companies risk is spread out.
The younger folks are helping pay for the older folks.
Until you leave that company and can't participate in their group plan anymore. IMO only buy life insurance when you have dependents, buy term when you start a family for long enough to see all your kids to adulthood. When your dependent children are grown adults they can provide for themselves, as for a spouse with smaller earnings, factor that into the term and during the course of the term put all the savings from the cheaper insurance towards the nest egg.
Nope, cause when you get sick and then eventually fired you have no life insurance if you die from your cancer etc. Take the free amount they offer but never buy it all through work
@@donjohnson1416 there may not be many other choices anyhow even if one does get sick.
If you have established life insurance through the company. The life insurance company will allow to transfer to some individual plan. Premium will probably be much higher.
My feeling though is that even with private life and disabilities insurance. Once they find out you’re sick they will find a way to cancel you.
@@Lon1001 Some jobs will allow you to keep the policy through Cobra. I have a policy from ten years ago from an old employer that I pay for every month. I am very thankful for that.
@@donjohnson1416 how do you afford anything if you get fired from work though 🤔
Does anyone know anything about the Northwest Mutual T80 policy? I can't find ANYTHING that isn't from NWM.
I used to work for NWM. I know those policies well. Not a huge fan. What's your question?
@@fleshcookiewhat made you stop working for them?
With inflation currently at about 10%, my primary concern is how to grow my reserve of 240k$ which has been in sitting duck since forever with zero to no gains, sure I'm all in on the long term game, but with my savings are lying waste to inflation and my portfolio losing gains every day, I need a remedy asap
IUL insurance you get 7-10% Guaranteed interest do your research IUL IS GREAT AS LONG AS YOU SET IT UP SO THAT IT IS FLEXIBLE FOR YOU. Dave is so old school and stuck on his old school ways. Things have changed in the IUL INSURANCE from years ago just find a great agent and make sure you get the least amount of death benefit so the advisory doesn’t make a commission. If you get the most amount of death benefit you will pay high commission just remember that.
@@Marquie22 IULs are garbage with their high fees/commissions and capped gains.
@@astroman30 And you must have a bad contract and set yours up all wrong, I haven’t witnessed this.
@@Marquie22 you haven’t witnessed with IULs with high fees and capped gains? Either you’re lying or stupid
Dave and this other guy are simply full of S$$t. If this is true why do Banks buy them and classify them a tier 1 asset? FDIC website....... 25% to 30% of larger bank assets are invested in permanent life Ins. like IUL's etc. I'm not talking about KEY EMPLOYEE INSURANCE I mean TIER 1 ASSETS.
Banks don't buy IULs.........they buy whole life insurance (BOLIs) to fund employee compensation packages.
Miller Kenneth Moore Nancy Jones Steven
That’s why I have PUL instead of a IUL
PUL?
Ok guys , So witch life insurance policy is a good one ? Is there one out there ?
Go see an independent insurance broker (not one affiliated with any particular insurer) and get them to find you the best term insurance plan you need.
IULs are pretty good. They offer living benefits and the payout u receive would be ur cash value you’ve accumulated and face amount you purchased. Not all policies are bad. Yes their are bad ones but still also good ones as well.
@@shiamoua4189 if you receive the full face value and all the cash value accumulated. How does the insurance company make money? What portion do they take? The only way you can receive all of your money is if you invest it all into good mutual funds, good etfs, and dividends.
Hi! If you want affordable and just Sickness and Death Protection go to term policy, but the cons from that if you didn't get sick or die before your Term lapse, If you renew it, your premium will be 10x higher. ( Term is better than no Insurance )
If you want Policy that has cash value , face value that increased and have sickness and death protection as well as your premium rate locked in, go for IUL. This is permanent so the longer you live, your face value go up.
LOL it just so happens that DAVE sells TERM INSURANCE.
Right? If an IUL is funded properly the policy will not only last the entire persons life but will likely grow in death benefit. This beats the alternative of a term policy that when the time is up your rates go sky high and it’s unaffordable. It’s guys like this why my clients wonder wtf when I breakdown their scheduled premium.