Is Term Life Insurance Better Than Whole Life Insurance?
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- Опубликовано: 21 янв 2018
- Don’t waste money on whole life insurance. Protect your family with term life insurance: goo.gl/LFpCEj
SUMMARY
In this video, Dave answers Ray’s question from Facebook. Ray asks, “Why term life insurance instead of whole life insurance? What is the difference?”
Term life insurance is just like any other insurance. You pay for insurance, and your beneficiary gets your money if you die. Cash value insurance, however, doubles as an insurance policy and an investment vehicle.
Say your term life policy costs $5. The same amount of coverage for whole life would cost you $100: $5 for the insurance and a $95 premium. That’s 20 times more expensive for the same amount of insurance!
Let’s say you want to close your whole life policy. Not only is the rate of return on your money so low that it won’t even allow for growth, but you could even have to borrow your own money that you paid and then pay interest to the insurance company. Additionally, when you die, your beneficiary will receive the face value of your policy, but all the cash you saved up is kept with the insurance company. It's one of the worst financial products in the world!
Dave always recommends term life insurance. Get 10-12 times your income and cover the ones you love.
RESOURCES
How much term life insurance do I need? Listen here: www.daveramsey.com/askdave/in...
Hear more about the tax implications of cashing out whole life: www.daveramsey.com/askdave/ta...
Thinking of switching to term life insurance? Read these term life mistakes to avoid: www.daveramsey.com/blog/5-ter...
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I had made the fatal mistake of investing into a whole life policy. As I soared to look at the money out in vs the money earned I saw I was -4K in the hole with cash value at $6700k. I just told my agent who posed as a friend that I want out. He tried to convince me but after seeing this video two days ago my mind was made up. Thanks Dave for the advice.
Dave is RIGHT! based on cash outflow, term life insurance is the BEST priced form of death benefit. In a 20 year period you simply pay SO MUCH LESS for term insurance. AND a ton of insurance agents sell them for commissions....
Yes it is. Term is the right way to go. Dave opened me up 15 years ago to insurance. Thank you.
I’m a single mother of 3 although one is an adult now. I have thought about this for years but didn’t understand it. Dave explained it well so I am going to do it now. Thanks Dave!
Dave, thank you for the good description.
I can't wait for Dave to discover pizza insurance
Hello Sir. Thank you very must for the information. I do have a term life policy. It ends at age 80, what should I do if by some miracle I live to be that age? I am on a fixed SSD income. I am hoping you or someone on this thread can answer my question. Thank you.
Made a video about this, I call Whole Life my "$30k Mistake"
Gracias Angélica, cómo están?
Thanks this always confused me
Thank you Dave!
Thank you! ❤
Smart... the idea of having a plan that is 10x ur income so that the interest would cover your family
I was conned by my financial advisor to get a whole life policy. That lasted about 15 months when I started listening to D. Ramsey. I should have known better because it was hard getting actual data about the policy.
Thank you!
Agents who sell this do not care about you. They know all this.
My husband and I have had whole life policies for almost 20 years. Now that we're both 40 with medical issues, if we cash out and switch to term policies, it would cost us the same monthly premium. Does anyone have a suggestion of what to do in this case?
What company do y’all recommend ? I was looking into AIG or Lincoln
What if you, for example are 30 yo and buy a term life insurance for 30 years and you don’t die in those 30 years? Does the accumulated money just go to waste or it just stops accumulating after the term but your beneficiary gets paid out whatever was accumulated in those 30 years? Thanks
So what happens when the 30 years is up? Do you renew the plan or what?