Dave Ramsey Was in Rare Form Yesterday

Newby

Guru
5000 Post Club
16,844
If you listen to yesterday's Dave Ramsey Podcast there was a guy calling in who has a wife 10-years younger than him. He needs to decide on his retirement pension if he wants to take $45,000 based on his life only or $35,000 based on him and wife (whoever lives longest.)

The guy was smart enough to know that if he takes the extra $10,000 he needs to see what life insurance would cost on him to protect his wife.

When Dave got ahold of it the only life insurance worth considering is 10-year term. And the numbers don't work out but since the average age of death for this caller is 15-years away (like people want to bet the farm on averages anyway) Dave says "No! Definitely take the $35,000. Don't even consider whole-life because it's a rip off."

This would have been a perfect example to explain why people with a large whole-life policy (or GUL) have a huge advantage when making retirement decisions. This is especially true when the breadwinner is older than the spouse.

If the guy is healthy, he should definitely explore the GUL option if not whole-life. Let's say they could get an amount of coverage on him to protect the wife for $8,000 per year. They are $2,000 better off on day ONE.

Now let's say she dies 10-years into his retirement and he lives an additional 10-years after that. He can cancel the life insurance and be $10,000 ahead from that point on (or sell the policy to his kids.)

What if she runs off with her old high school boyfriend 2-years after he retires. With Dave's plan he is locked in to $35,000 for the rest of his life because he protected her. With the life insurance option, he cashes out and has $10,000 per year extra.

You have to hand it to Dave. All roads lead to buying more of his books, seminars and websites. Terrible advice to the masses though.
 
Last edited:
Not to mention he will never answer anyone that talks about participating wl or any gul or iul I guess ignorance is bliss He always skirts around it and no ins makes him answer
 
I'm a huge fan of Dave Ramsey. Being debt free saved my family when my 11yo son was diagnosed with bone cancer in fall 2011. His debt free plan is wonderful. But Dave is dead wrong on life insurance. Newby's example is one of many scenarios where permanent insurance is better. I hate when anyone paints with such a broad brush like he does concerning insurance. I guess you can't be right about everything.
- - - - - - - - - - - - - - - - - -
Newby, how old was the guy? My church does a DR class and I would love to make an illustration using his situation to show how term would be a poor choice in this situation to people from church that bring up his views on insurance. Thanks.
 
Last edited:
I think he was early 60's I will have to listen to it again. It's in the middle of yesterday's podcast.
 
I'll grab it and listen to it. Might help to have that audio available on my phone for the next time I run into that situation. Thanks!

The thing that really gets me is that these people will say they are only willing to do term because Dave told them to, instead of getting informed (which is what Dave tells people a lot - find a RE or insurance agent that will teach you) and making an informed decision based on their situation.
 
I'm a huge fan of Dave Ramsey. Being debt free saved my family when my 11yo son was diagnosed with bone cancer in fall 2011. His debt free plan is wonderful. But Dave is dead wrong on life insurance. Newby's example is one of many scenarios where permanent insurance is better. I hate when anyone paints with such a broad brush like he does concerning insurance. I guess you can't be right about everything.
- - - - - - - - - - - - - - - - - -
Newby, how old was the guy? My church does a DR class and I would love to make an illustration using his situation to show how term would be a poor choice in this situation to people from church that bring up his views on insurance. Thanks.

.....changed our lives too. My wife and I were living the "American dream"...and by that I mean two car payments, credit cards, eating out, vacations oversees.

We put an immediate halt to all of it about 8 years ago - we have one car which is 14 years old, pay for everything with debit and "security" is actually having savings.

Wanna know the difference for me between going to Aruba and driving 2 hours to the beach? About 10K. That would be the only difference.

The other difference is when my son wants to go to college, I can stroke a check instead of getting him buried in student loans.
 
I think most of his out of debt thoughts are good it comes Down to siting down and realizing how much money you pay out in interest and how miluch better it can be with out financing everything But the fact he is telling people that buy term is the only way is disingenuous at best I think if you are serious a well balanced portfolio is the way to go and use the partcipating whole life as your base growth. Then invest whatever wherever.
 
As far as his cheerleading for people to pay off debts, he's fine. But don't think he invented living debt-free. He gets a lot of credit for that. But a lot of us were living that way when Dave Ramsey was living large and going bankrupt.

I never needed a guy on the radio telling me to accumulate wealth rather than debt. It always seemed pretty obvious.

But he's OK at that part because people do need some encouragement sometimes. But his insurance and investment advice is really bad.
 
If you listen to yesterday's Dave Ramsey Podcast there was a guy calling in who has a wife 10-years younger than him. He needs to decide on his retirement pension if he wants to take $45,000 based on his life only or $35,000 based on him and wife (whoever lives longest.)

The guy was smart enough to know that if he takes the extra $10,000 he needs to see what life insurance would cost on him to protect his wife.

When Dave got ahold of it the only life insurance worth considering is 10-year term. And the numbers don't work out but since the average age of death for this caller is 15-years away (like people want to bet the farm on averages anyway) Dave says "No! Definitely take the $35,000. Don't even consider whole-life because it's a rip off."

This would have been a perfect example to explain why people with a large whole-life policy (or GUL) have a huge advantage when making retirement decisions. This is especially true when the breadwinner is older than the spouse.

If the guy is healthy, he should definitely explore the GUL option if not whole-life. Let's say they could get an amount of coverage on him to protect the wife for $8,000 per year. They are $2,000 better off on day ONE.

Now let's say she dies 10-years into his retirement and he lives an additional 10-years after that. He can cancel the life insurance and be $10,000 ahead from that point on (or sell the policy to his kids.)

What if she runs off with her old high school boyfriend 2-years after he retires. With Dave's plan he is locked in to $35,000 for the rest of his life because he protected her. With the life insurance option, he cashes out and has $10,000 per year extra.

You have to hand it to Dave. All roads lead to buying more of his books, seminars and websites. Terrible advice to the masses though.

Good stuff.
So basically we need to ensure she has at least $35000 a year for 25 years however much face amount that is. If he dies later she has more than enough if he dies early she has enough. What would standard issue premium be for 60 male on that. I guess the only defense for Dave is if they hit hard times and the policy lapses and he dies.
 
Back
Top