Don’t waste money on whole life insurance. Get cheap term life insurance here, and then invest the rest!
SUMMARY
Brittany from Johnson City, TN calls into The Dave Ramsey Show to ask Dave about her life insurance policy. She currently has portfolio insurance, with both permanent whole life and term life insurance included. After going through Dave’s Financial Peace University, she learned that Dave doesn’t recommend whole life and wants to know if he agrees that she should switch to term life insurance.
Dave reminds her, “Never under any circumstances use life insurance as an investment vehicle.” He advises instead to take the money you’re putting into a whole life policy and invest it in good mutual funds.
When you use life insurance as an investment vehicle, you get a bad rate of return regardless of what your whole life agent quotes you. You make somewhere between 3–5% on your money rather than making 10–11% in mutual funds. Additionally, when you die with cash value life insurance, your beneficiary is only paid the face value of your policy. The cash value that you saved, that only accrued a small rate of return, is never given to your beneficiary. And you pay 20 times more for it than you would for term life insurance.
Dave believes the best way to buy insurance is to go through a broker that shops around several companies and finds you the best term life insurance deal.
RESOURCES
Hear more of Dave explaining why term life is the only type of life insurance you should have:
Learn the real truth about life insurance here:
Learn more about whole life vs. term life insurance:
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