Dave Ramsey doesn't believe that whole life insurance is ever necessary or a good idea.
He believes that everyone should buy term, pay off all debts quickly, build up a huge net worth and become self insured so that you never need any life insurance.
That is a great plan but it doesn't pan out for a lot of people for the same reason that we aren't all in great shape and our perfect weight for our height.
Everyone knows what to do to become rich but most just won't actually do it. Instead of buy term, invest the difference and become rich...most people buy term, spend the difference, retire middle-classed or worse and have to buy more insurance later in life when it's much more expensive.
Dave is not a proponent of whole life insurance (generally any permanent for of life insurance for that matter.) He is a debt reduction specialist that buys term life insurance and pays down debt first before investing in mutual funds. His basic mantra is the permanent life insurance is not a good investment.
Financial Advisor, Cona Financial Group, La Verne, CA
Dave Ramsey doesn't like whole life insurance. In fact, he dislikes it so much that he misrepresents it (intentionally or not) when he talks about it on his radio show. Of course, it's possible that he just doesn't understand it, but I suspect that his opinion of the product is based on his previous experience as a life insurance agent with A.L. Williams, the "buy term and invest the difference" company.
As an A.L. Williams agent, he was taught to represent whole life (which people owned) as a bad product which should be replaced with term insurance (which he sold). So his bias against whole life stems from there.
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He believes that everyone should buy term, pay off all debts quickly, build up a huge net worth and become self insured so that you never need any life insurance.
That is a great plan but it doesn't pan out for a lot of people for the same reason that we aren't all in great shape and our perfect weight for our height.
Everyone knows what to do to become rich but most just won't actually do it. Instead of buy term, invest the difference and become rich...most people buy term, spend the difference, retire middle-classed or worse and have to buy more insurance later in life when it's much more expensive.
As an A.L. Williams agent, he was taught to represent whole life (which people owned) as a bad product which should be replaced with term insurance (which he sold). So his bias against whole life stems from there.