I've Been Investing $1,000 A Month Into Whole Life Insurance
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- Опубліковано 27 сер 2024
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Not all whole life policies are created equal. A policy with a mutual based company can give you guaranteed growth with compound interest all tax free.
I dont understand why wouldnt everybody use these mutual bases companies instead of an advisor who cant?
@@PennsylvaniaHomesforSale investigate this you will be shocked what you will find
@@AlexbatYudah you talking about infinite Banking?
says the insurance salesman.
What he's saying is, "Why pay fees for life when you can pay fees for my mutual funds?"
The caller says the surrender value is worth more than what he's put in, after 10 years...meaning he made money, and Dave, without knowing any details, suggests to liquidate and put into mutual funds. If he was being honest, he'd find out details. If he was being honest, he'd recommend index funds instead of mutual funds. But, let me guess, he recommend the investment he makes money on.
If you invest in stocks: index
If you want a death benefit: term
If you want to preserve wealth or want retirement cash flow: whole life
If you want to diversify: do all of the above
Also, there are cash value accumulating universal life policies that have an increasing death benefit. The contracts usually read "Cash Value Accumulation $X + Face Value $X = Death Benefit $X" i like his "Live debt free" message but He is absolutely 100% wrong that thats not a thing. Also he shouldnt be talking like that without having read the contract. He uses a national audience and does this. Its very unethical, and you can tell he isnt an agent based on this one conversation. A life agent would ask to look at your contract and make a recommendation based on their products and your needs and concern. Most people are understandably lost when it comes to insurance and what he did here was wrong.
If you pay $120k over 10 years just to have it be worth a small amount over the $120k, yes you came out ahead but not by a lot.. you have to factor in inflation and lost opportunity on money to decide if a small return over a long period is worth it.. I have a whole life insurance policy in front of me, still deciding if I want to buy it, and it is very expensive, and this is with a preferred rate... it doesn't take until about the 18th year in the policy where my guaranteed rate is equal to more than what I paid over the years.
I started listening to Dave a few months ago. I like how he talks about living debt-free which everyone should know anyway. But his biggest talking point is putting your money in a vehicle that you pay fees on whether you make money from them or not. Mutual funds have fees on top of fees. He always says that a low percentage of mutual funds actually beat index funds. Yet he doesn't tell you exactly which mutual funds those are. At least not in the videos I seen. So for the passive and lazy investor should just put money in index funds. They have the lowest fees.
And it doesn't sound like he knows anything about whole term life. I think he's sponsored by some mutual funds
My Affordable Healthcare the best advice I ever read
Aren't you making broad recommendations without knowing people's individual situations?
You won't be taxed on whole life on a loan from the policy. What was the death benefit value? There is a lot of information not provided in this video..... Shame....
Dave Ramsey doesn’t know very much about Whole Life. Good luck to any Ramsey fans out there. You will need it.
Good luck to you Dennis you are wrong 😂
@@angelangiangi9110 Hes dead wrong. And its amazing who do these people represent or work for???? Area 52???
@derek flint clearly you weren't very successful in the business
lmao this is a joke right? I bought whole life and when i asked about cancellation and details, it’s EXACTLY like what Dave says.
So many whole life insurance salesmen freaking out in the comments :P
It is because Dave doesn’t know his whole picture. If you are actually legally advising some one, then there is a rule that says “know your client” but Dave gives advice to the masses and because of this he isn’t bound to give a single person.. there for he isn’t obligated to give real legal advise.
I will go out in a limb and say some giving a $1000 a month to anything,other than a mortgage, probably isn’t the average masses.
@@ssteffe2 I put $24k per year into it
my dad started one of these policies many years ago. i cashed it and invested it, was the right things and i managed to retire early.
I sell insurance and securities and I can tell you I get paid much less of a commission selling whole life(set up the correct way) than I do selling securities. Just like investing in the market, or anything else for that matter, if you are uneducated you can and more than likely will lose your shirt. Please my good friend educate yourself on the infinite banking concept. It’s been used by Every single family who’s wealth is created and makes it passed the 3rd generation. It’s been used by many families to create and start generational wealth. If you are not willing to educate yourself and learn more about a product, please reframe from giving old antiquated advice from the time of Fred Flintstone. Look up Garrett Gunderson and educate yourself and then educate your community. I believe you have an amazing program for getting people out of debt, but fall short when telling people how to invest and where to invest. Thank you for giving me a financial road map and a slap in the face, but if I followed your all debt is bad strategy I wouldn’t be worth 4.5 million dollars at the age of 31 only 2 years after deciding to turn my life around. And no that number does not include any equity built up in any property I own. That’s including the 3.1 million I have in the 23 whole life policies that I own.
They grow at 5% tax free.
Can be borrowed against at anytime. Cant be made to sell if I were sued.
And it pays out 97% of the time unlike term which only pays 1.1% of the time.
Please stop giving uneducated misinformation. I beg you. It your fiduciary duty to look into this now that you know better. Thank you for all you have done and will continue to do.
Courtney Kimbrough
@@kimbrough2046 I have invested in a $700k whole life insurance policy and am reading a book on infinite banking. I want to buy a vehicle through my 2 month policy. Is it too early?
@@kormynsims9506 It's never too early to utilize your policy. As long as you have the cash value, take out from the carrier and setup a repayment schedule and stick to it.
@@juanzapata7701 Thank you very much Juan. You may have just changed the game for me.
@@kormynsims9506 You're welcome... What carrier is your policy with?
So Dave Ramsey says that the guy has already lost his shirt by even being in the Whole Life Policy, but then the guy says that his cash value is higher than the premiums he paid in over the 10 year period. I like Dave Ramsey for many things, and he is right on about paying down consumer debt, etc, but it is irresponsible for him to simply make a blanket statement about anything including Whole Life Insurance without knowing all of the details...This guy has over $120,000 in cash value sitting in his policy ready to be used tax free for wealth building investments not even counting the Death Benefit on top of that, and all DR says is get out as quickly as possible...Give me a break...
If that money was invested in a mutual fund it would be doubled and more
@@yazeedgh3812 A whole life insurance policy is NOT an investment strategy. It is a savings vehicle...Comparing it to a mutual fund is irrelevant...
@@yazeedgh3812 IS that guaranteed?
exactly. if he doesn't want to pay anymore. Go paid up. Then you don't lose anything except a little of the death benefit.
@@yazeedgh3812 life insurance is not designed to be compared to mutual funds. It is a bond and cash alternative. Anyone who tries to sell it otherwise is doing just that, selling. We use it for our clients all the time. But only when there is a segment of money we are looking to carve out as a safety net for retirement.
Imagine paying $1000 a month for 20 years and the insurance company just keeps your money when you die
@@perfectsense3240so, purchase a PUA to an already expensive policy that is (at least) 20 times higher in premiums than term? You think that’s a good idea? Buying term and investing the difference waaaayy outperforms any trash value insurance policy.
💀 ☠️ 💀 ☠️
@astroman30 term has zero death benefit.. for 99% of the people.. the the fees and commissions the insurance make on term is crazy.. basically everything you pay into term the company keeps. It keeps your cash.. 99 percent of the time.. lol
Its not an investment, its an asset. You don't 'invest' in whole life policies for the return, you do it for tax efficiency and safe growth as part of a full financial plan.
Either way it's horrible. Buy term and invest via 401K or ROTH IRA. Far superior efficiency investment than whole life.
@@ACD-gr8vg - Only 7% of the population make too much. So that nulls your argument for 93% of the people. The others can invest in 401K or other tax free investments. Muni Bonds is one example of tax free investing. Please do some research before trying to spam the lousy whole scam on us. Dave is right. Live with it!!!
@ Alexander - No thanks. I like the concept of buying term and investing the difference. My neighbor has state farm term insurances and they are happy with it. I don't need life insurance right now, but when I do, it will not be whole life. Why? Because Dave is right.
@@JohnBowl14690 what's he right about?
@@JohnBowl14690 Will you be insurable when you "decide" you need life insurance?
Don’t ever buy a term life Insurance, because it means you are signing a contract to die after the term expires. The only reason you should buy a term life Insurance is if you are flat poor and cannot afford an IUL that builds cash value and compounding interest
IULs charges high fees and commissions which is why you are pushing this garbage.
astroman30 I can help you understand a lot of things average Americans don’t understand about the rules and Principles of money. It will safe your life the agony because if you get it right your life will never be the same. My life has changed because I understand the rules of money and to make it work for me.
@@stephaniafombo2468 Stephanie, Dave and I can teach how to make money without ripping people off. I advise you to read all of Dave Ramsey's books. Also, read Suze Orman, Smart Money Magazine, Motley Fool and a slew of others who tell people to stay away from "cash value" insurance. Obviously, you need some morality in your life so you can forward without stealing.
@@astroman30 one question for you? Why are banks and corporations heavily buying cash value life insurance if it wasn’t that good. Dave and Suze don’t even practice what they preach. Why is does Suze only have 5% of her money in stocks where is the rest of her 95%?
@@astroman30 they say when you are not informed you are deformed and you obviously are deformed because you haven’t educated yourself enough about IULs. Read books like the money wealth life insurance by Jake Thompson, the power of Zero by David McKnight, the pirates of Manhattan and more to build some self confidence before you make a comment like this next time
I looked at one today, 40 yrs old, the cost for 500k was $400 per month. A smaller portion of the $400 is paying for the 500k life insurance and the larger portion is building cash value. In 10 years, the cash value is equal to the payments you have put in. You can pull money out anytime. The interest rate was 7.5 or higher and guaranteed not to lose money in a market crash, etc. The cash value is paid on top of the 500k death benefit. Supposedly the money growth is tax free on the plan I looked at. It gets more interesting if you elect to put in a lot more money on top of your premiums and get compounding growth. If you stop making payments, your life insurance will continue by drawing down a small portion of your cash value. Didn't sound too bad.
You're smart to go beyond the BS that DR spits and to look for yourself.
What company was that?
It is great !
Way too late, but the question to ask is "How is the insurance company making a profit on this?" And trust me - *they are*.
Mathematically the money in the cash value is your money’ why is it that you have to borrow against your own money. It doesn’t make sense to me at all. If you saved this money in a savings account you will margin around the same amount of money in your cash value. It’s better you invest it in mutual funds and buy cheap term life insurance.
Horrible guidance, let him take out his gains on a loan basis and he won’t have any tax consequences. He doesn’t need to withdraw it. Whole life works great in many situations and is one of the most powerful buffer assets that exists.
This made me sick. You just ruined this family's wealth. He most likely made this WL purchase to leave a legacy. You compared it to retirement income investment. I imagine at that premium the face amount was $1,000,000. So what if he put a 120k in...if he dies tomorrow his wife and kids have 1 million. If he continues to pay the premium and dies at age 90 he is leaving a substantial amount of tax free income. If he ran out of money in retirement he also could of borrowed from the policy TAX FREE and never had to pay it back!
Fully agree. This comment needs more likes.
@@PositivelyBrainwashed I cannot believe that Dave escapes examination when he makes terrible advice like this and doesn't ask for details about policy design and goals. If this policy was built correctly, 10 years in this guy should have a policy that is generating 4-5% growth and its tax free. Friends, if you are looking to Dave for advice on Whole Life, Google Dave Ramsey is wrong about Whole Life and see him refuted.
So, let me get this straight. The only way to get the "cash value" from my policy is to BORROW against it? And you think that's a good deal?
WoW, what you just did to this poor guy. You destroyed his life. Stop given investment advice.
Like seriously. Destroyed.
Dave is actually right. Anyone can research and see he is right. Whole life absorbs your cash value if you die and only pays the face value. Google it. There is no reason why anyone with common sense would buy a policy where you pay 10 times the amount in premium, but can only collect the face value.
Tony - I'm sorry if you got oversold on whole life policy. Better do your homework because Dave is right and your getting taken to the cleaners.
@@ACD-gr8vg - No thanks. Dave is right.
@@ACD-gr8vg - And you are sponsored by Northwest.
Really? You need to read Nelson Nash. If it's with a Mutual co. stay in it! How come banks buy a ton of it then?
Right on Plan.......................!!!!! Ramsey doesn't have a clue
Can a foreign family trust trustee invest in whole life and not have to pay taxes on profits
Simple question: What happens to the "cash value" when the person dies?
@@astroman30 The cash value is built into the death benefit...People make the mistake of treating the cash value and the death benefit as separate entities. Here's the thing, if you don't plan to use the cash value for investments to build more wealth while you're alive, then it is honestly pointless to have it. The beauty of the cash value is that you can take out loans against your cash value tax free to invest however you wish. You can pay back the loans however you wish, or you can choose not to pay back the loan. It's completely up to you. If you don't pay back the loan, then it simply comes off your death benefit when you die. I personally use it for real estate investing, and I always repay the loans to keep the cash value ready for my next investment. People also make the mistake of thinking of the Infinite Banking Concept as an investment strategy. It's actually simply a savings vehicle that has guaranteed growth to use to hold your investment capital. If you're interested, I highly recommend reading Nelson Nash's "Becoming Your Own Banker" book...It's only around 80 pages, and is an easy read...It explains the concept really well...It's not for everyone, but it is definitely an awesome strategy for people with the discipline to make it work.
@@matthewhammond8138 Here's the thing, you're lying. In A WL policy, the CV is never part of the DB. So, stop with that nonsense. We all know that when the person dies having a WL policy, your disgusting insurance company keeps the CV. I believe you when you state you borrow against your own CV to buy investments, because that take's an idiot to not figure out that you'll lose the CV in that policy unless you cancel it. Oh, and when you cancel it, the "surrender" charge is astronomical. I advise you to listen to Dave Ramsey, Suze Orman, Smart Money Magazine, Chris Hogan and a slew of others who aren't weasel insurance salesmen and can teach sophomore investors like yourself.
Dave is probably completely wrong. It all depends on the type of policy allen bought. Most have a guaranteed growth of 4-5%. As well as a dividend paid yearly. Dividend isn’t guaranteed but usually in the range of 4-6%. So after the 10 years, Allen can probably have his policy premiums paid for by the dividends. No more money out of pocket, but his cash value continues to grow. Cash value can be borrowed to invest in other ventures. The bonus is that the cash value continues to compound as if the full principle is still in the account. It’s a fantastic way to build wealth. It’s a long term wealth builder. Not for everyone.
Simple question, what happens to all the money I put in my cash value when I de?
@@astroman30 you get net death benefit, which is a combination of cash value and face amount death benefit. There is a scaling that is used depending on how soon or long it took for you to die after policy but there is a point where you get same full amount.
@@Spitcane "...a combination of cash value and face amount death benefit." By all means, name your provider that GUARANTEES payout of the CV and DB to the beneficiaries. I will screen shoot your comments and email to them to make sure you get the commission.
@@astroman30 it's not in guaranteed but that's the actual historical performance with top mutual companies like new york life and mass mutual (I don't know about others). It's the same way if you deposit $1m in Chase, you aren't guaranteed to get the $1m back, only $250k. But looking at actual historical performance you are very likely able to get it all back if you want.
Dave doesn't really understand insurance. This guy should have gotten into a Index Universal Life. Which would possibly have a much higher value. The way the caller discribed it that may be what he has. 90% of the clients I meet don't understand what they signned up for 10 years ago. Before he cancels and I'm not saying he shouldn't, but he needs to understand what he currently has. It may be a million dollar policy.
Sounds like it from the amount of premium he is paying.
120k in, it only requires another 120k and is probably a confirmed nice chunky payout. I think if you reached half way, finish line is pretty close assuming it takes 20 yrs to finish premiums
In less than 60-seconds you witness the worse advice WITHOUT so much as a thorough review of the man's policy who clearly stated he did not have in front of him. Dave, perhaps the only advice to give people is stop calling in👌
Simple question: What happens to all the "cash value" when the person dies?
Great....since you stated it "depends," please write me up a WL policy that guarantees BOTH the CV and DB to my family upon death. I like to have that myriad type of policy. Again, it has to be a WL policy.
Is that a picture of your Mom?
This is not accurate. I have zero skin in the game .
Sean Baca Hey Sean, if you’re looking for some advice I’d be happy to help. I do some work with financial planning and I could at least offer my thoughts on your situation if you’d like. Just let me know, hope you’re doing alright.
@@TheMikeLauren I would like some advice
Dave Ramseys is clue less and all insurance companies are not the same....do your research!!!
Clueless multi-millionaire? Self made, Whole life sucks. Who are you selling it for?
@@geezusfreek1 y?????sucks???
@@lionheart93 because they keep the Cash value when u die
@@onamission7349 so it would make sense if u die sooner and u have paid a smaller portion of your insurance policy then.
@@lionheart93 So you like paying(overpaying) for 2 things but you only get one in the end?
Please, please, if you are anyone at all, completely ignore Dave Ramsey on life insurance. He has no idea what he is talking about. For example, whole life insurance usually has paid-up additions, so you will almost ALWAYS get more than the face amount. And if you have a large enough whole life policy, you can actually annuitize the cash value later in life to create a steady income stream AND provide your beneficiaries with hundreds of thousands or millions of dollars (tax free) when you pass away. The larger the policy, the more you can earn AND pass on. You can end up netting hundreds of thousands more than what you put into the policy, besides providing your beneficiaries with a sizable death benefit.
All you have to do is pick up the phone and call a life insurance agent with a reputable company and they will sit down with you and show you these options.
David Eagin let me guess you sell whole life. It's a terrible investment hands down. Think if this man had put $120,000 into vanguard over ten years instead of this stupid policy. He'd have $173,986. That's an extra $50,000 he now doesn't have. And that's assuming only 7%. The last ten years stocks have actually done way way better than 7%.
David Eagin I've heard this several times over from other people but, I have yet to hear from someone who is or has experienced that process! This is what holds me back from giving it a shot. Speculation means nothing! I know someone who has a WL policy but I generally tend to disagree with some of their business and investment options.
Rebecca Shields
Easy to say what a mutual fund investment would have made based on past performance. However, no idea what might happen with stock market over next 10 years. Certainly cannot predict that outcome. The only sure thing is that you will pay taxes on the gains, and less flexible to borrow from.
Whole life is a sure bet for gains over time, has tax advantages and a great tool for financing various big ticket items over a lifetime. A properly structured whole life policy should be part of every family’s financial portfolio.
@@rebeccashields9626 you find me a mutual fund paying more than 1% after all the fees and taxes and I'll mail you $100. If you borrow against it you will get hit with a capital gains tax as well as have to pay it back. A whole life insurance policy trust that you've overfunded can be borrowed against not from and therefore no capital gains tax. You set the payback amount and time and the interest goes back to YOU and YOUR account not the bank or insurance company. You need to research more and realize also that the insurance trust invests in old company debt not the stock market - I'll let you guess which one isn't volatile.
@@williamjohnson5877 Doesnt seem a sure bet in this case of 1k$ a month for 120k$ face value, where are the guarantees on the face value and better monthly fees? IF you are paying a premium you should have better face value.
I did something very similar. Despite the cries of my prior financial advisor (whom I fired, partly due to this), cashing this out has *proven* to be the smartest thing I could have done.
Explain?
why was cashing it out a smart thing?
Thats highly doubtful and extremely situational.
I don't get what the negative side is. He put in 120k and he has a cash value of 120k+. Also, if he were to die, I am sure the death benefit is much higher then 120k.
He could've bought term, invested the difference and had insurance + well over 120k in the investment. If the man would've died with that 120k in the account, his beneficiary would've only received face value of the policy and the company would've kept the 120k.
ZoHBo yes, but the face value is probably around 600k, so I think it's still a good deal.
600k Face value term insurance is less than 100 a month for a 40 year old.
He can borrow the cash value, invest it and still get dividends in the cash value. That's if it's with a participating mutual life insurance company
@@subjectmatteramateur16 why is he borrowing money that he has put away for 10 years? And to borrow means to pay back, so I never understood that part and why that makes sense to people.
I can't believe that he gave such a bad advice. First of all, he didn't even look into the details and gave the wrong information. If I wasn't sure I definitely not gave the answer with such confidence.
The man who called him was paying 1k$ a month.
@@sebas8225 it depends on his death benefit amount. I have clients paying 60K a year.
What is bad about Dave’s advice?
Term life insurance is all I need and all I can afford. PERIOD.
if it is all you can afford, then it is the perfect solution. PLI is often missold to the average American. PLI is designed for the upper middle class and the wealthy. It is not a knock. But term life with a ROTH IRA is a great solution for the average family. But for anyone passing on wealth to the next generation, anyone who is in a higher tax bracket, etc, PLI can be a great piece of a plan.
Dave ramsey should be getting commission from every debt owed.... He is by far America's best debt collector...
Lol
Amazing how quickly DR appraises a situation. Equally amazing how the pre-supposition is all permanent life insurance is "whole" life. DR's slap-dash recommendations would get a real-life licensed advisor sued by his clients or fined by the regulators.
It’s all garbage no matter how you package it.
Wow i thought Dave was more informed on whole life. The guy could borrow 100k against his cash value and the 135k would still earn more interest than the loan he takes out. Dave it's called life insurance not death insurance. You seem stuck on the death benefit
That's what life insurance is for...insurance in case you die. Now, the investment portion is different. Whole life investment portion is a pure ripoff for reasons that Dave discussed. AND HE IS RIGHT. Whole life absorbs your cash value if you die and only pays the face value. Google it.
Dave is right. No reason to borrow your own money, from a policy in which your returns are less than 1/3 of the what the SP500 is performing at.
Permanent cash value life insurance technically isn't an investment, it's an insurance product, just saying.
So is Term.
@@astroman30 tell me something I don't know
Whole life insurance is no longer sold here in Australia
Hi Jamie, do you know why?
Love how Dave fails to mention that permanent policies from a mutual insurance company include dividends. If you're with a strong mutual insurance company you'll be increasing the death benefit and cash value each year. Of course it does take time for your policy to start growing to something substantial but Alan is making the worst mistake of his life by pulling the plug on his policy right as it's starting to accumulate cash value beyond what he is paying all the while protecting his family with a death benefit well beyond what he has payed in to.
Which mutual insurance companies would you reccomend?
@@STeroidsnicca Hey James, in short I would strongly recommend going with a mutual insurance company. However, I would recommend doing some research into what is important to you as far as deciding which company you'd like to go with. I don't think you'd be surprised to find that I'm an agent with one of the largest mutual insurance companies from my comment and am open to having a zoom session to show you what building a strong policy can do for you and your family.
It's tough o un-brainwash people from what they have been told for so many years..
They are all garbage.
@@guitarphreak100
It figures that you're an agent. They're the only ones promoting WL policies. And they are ready with their talking points and their swinging pocket watch to get you to buy their garbage.
As an Insurance Broker Mr. Ramsey does not have all the facts.
But Ramsey has enough of the IMPORTANT facts and he is right.
As an insurance broker could tell us why whole life is a good idea?
@@STeroidsnicca Ramsey is a joke. Life insurance is an estate plan tool, it is used as a buffer fund when the market drops. Term insurance is for those who don't want to protect their families. If you believe you are market wiz,go for it. When WWll happened the US was broke,the market didn't help but the insurance companies carried the country with loans to keep it afloat. If you don't like insurance that's fine..good luck.Remember,the dollar is round
As an insurance broker, your a criminal
Do you also sell Time Shares?
I hope the caller didn't listen to him..
Dave is actually right. Anyone can research and see he is right. Whole life absorbs your cash value if you die and only pays the face value. Google it. Hopefully the caller did listen to him.
@@JohnBowl14690 You're not factoring the tax advantage and you can get an LOC and if you have participating life insurance. You can borrow up to 90% because it's not affected by the market. You can basically live off your LOC tax free, while your cash value continues to grow.
@@PositivelyBrainwashed - You can do the same thing tax free by doing either a ROTH IRA or Investing in tax free muni's.
@@JohnBowl14690 what do you mean absorb cash value? example?
@@lionheart93 - Meaning...the insurance company keeps your cash value. Yep, you paid for it, but they keep it.
Not necessarily true What I might do is to stop paying the annual premium or let the dividends pay the premium, if any, and let the cash value grow. The death benefit can increase and if you are paying $12,000 per year in premiums you most likely don't need the money. Another option is to reduce the premiums to zero by taking a reduced paid up option. In conclusion, unless you need the money for some emergency, at least do the reduced paid up options and keep the policy.
The cash value is what keeps the policy enforced.
@@insurancedothan3045 So many agents do not understand the complete workings in an insurance policy. Today s' policies offer some very complete values and you will always get more back than what you paid in at the time of death. Does it mean whole life is good for everyone? No! Does it mean term is good for everyone? No! Tax benefits are a BIG consideration.
We are paying for 2 insurance policies. One is term life and the other is accidental death. We just got these policies and I can't even tell you how much I am a lot more at peace knowing I have these two items in place that if and when something happens I will have something of a financial cushion and my premiums are low and affordable. I would like to get a whole life policy but I am not young, therefore my premiums would be very high. I would advise to get whole life when you are young, when the premiums are low and it will be worth it in time as you will then have some cash value you can tap into, then you'll still have your Face amount minus the cash you took out. Life insurance has also changed with the times and Dave Ramsey is not qualified to make statements as to the state of affairs of life insurance. He apparently has no clue how it works.
Absolutely. Establish whole life policies when you are young and the policies are more affordable.
Lot of whole life insurance agents getting their feelings hurt by DR's advice.
Oscar , can you explain your reasoning? A lot of these comments at least are explaining their reasons why
There’s no feelings involved, this type of bad advice is alarming. Can’t believe people actually buy into this.
Whole life pays face value plus paid up additions which is what the cash value goes towards. If you die, you do get the face and the amount of insurance your cash value buys. If you look at an illustration whole life death benefits by strong mutual companies have increasing death benefits.
Horrible advice!!! Take a loan out against the policy value, and use that money to set up a real estate holding corporation, then use the balance as a loan to that business for a down payment on some income property. Charge interest to your business for the loan greater than the interest on the loan from the whole life. You make income as CEO and loan holder and your life insurance is paid for by your tenants. Ramsey is no Rockefeller, he may get you to living comfortable, but he will not get you to generational wealth.
Take a loan against your own money only to lose the cash value when you die, and you think this is a good idea?
If you really need a tax advantage plan get Equity indexing Universal Life unlike a Roth IRA it allows you to touch 100% of your capital and capital gains at any age plus it allows you to contribute more than a Roth IRA all with no Market risk but yet you get all if not most of the interest credited by the S&P 500 plus a death benefit and long-term care protection
Wrong! Dave needs to stick to helping people get out of debt and stop giving investment advice!
Classic Nut 😂😂
Classic Nut why you say that lol?
🤦
Classic Nut, he’s great at getting people out of debt, terrible at investment advice. And to be honest, he’s not even that good at getting people out of debt because he totally ignores the fact that you can build wealth to offset your debt
Dave is actually right. Anyone can research and see he is right. Whole life absorbs your cash value if you die and only pays the face value. Google it. There is no reason why anyone with common sense would buy a policy where you pay 10 times the amount in premium, but can only collect the face value.
I have a hard time understanding . You put in $120 and it worth more than $120 ? Cash value is more . Where is the lose . How many people even have $120,000 in 10 years ?
Because if you invested that money yourself you would have much more,.
@@MarincaGheorghe So what would you rather invest in?
You have to do comprehensive approach, don’t only use WL, don’t only use investments. To stay healthy do you work out and eat healthy or do you just do one or the other?
Every financial vehicle has its pros and cons.
Wow, this advice was a joke. No factfinding of the gentleman’s goals and objectives, no understanding of the product. Just blindly saying it is a bad deal. Sounds like Dave’s bias overwhelms his objectivity. Whole life has a place in many people’s financial plan. It can be a great tool. However for Dave it is always garbage. Case in point - Bank of America has $18B in cash values. I assume that Dave would tell all the board members that they got ripped off! Dave is great at somethings - insurance though is not one of them.
This is Dave´s problem he aint doing research on the man´s financial context and assets, he just takes it at face value that it´s a bad deal because the man call him, because the face value of the deal itself seemed bogus.
$1,000 a month for life insurance is VERY HIGH
@@mjtuf1 depends on the structure. If your wanting to be your own bank then its low. All depends on the situation. Best advice I have ever received was to read "Becoming your own banker" by Nelson Nash. 20.00 book has changed my future life.
Dave is actually right. Anyone can research and see he is right. Whole life absorbs your cash value if you die and only pays the face value. Google it. There is no reason why anyone with common sense would buy a policy where you pay 10 times the amount in premium, but can only collect the face value.
@@JohnBowl14690 exactly
Wow. What kind of advice is that? Does he even have security license to advice?
I do. What's your question
I believe that he holds not types of licenses..
Dave is completely clueless about how whole life works, especially with certain riders.
Wrong. Dave is actually right. Anyone can research and see he is right. Whole life absorbs your cash value if you die and only pays the face value. Google it.
@@JohnBowl14690 You really should know at least the basics of the subject matter before commenting on it.
@@peedinkus389 - Please tell us the basics. Dave and I already explained the basics and that you cannot collect BOTH the cash and face value if you die, so please tell us why you think we should pay for BOTH when you only collect on one?
@@JohnBowl14690 Because the commissions are higher?
@@JohnBowl14690 If a person has a "Return of Cash Value Term Rider", the beneficiary gets both the Face Value and the Cash Value upon death of the insured, plus the fact that the Death Benefit even increases over time. It would be a good idea to check with a person to see whether they have this rider before diagnosing the problem. Chances are that the gentleman didn't have this rider, but if his agent is saying he gets the cash value and the face value, he may honestly be telling him that he in fact has this rider.
Buying Life insurance for any purpose other than pure insurance is usually a bad idea.
unless you actually end up with your own bank with better interest rates in purchases, and good tax evasion, it´s a bad deal.
How did Dave not even ask the face value of the policy? He also didn't ask the caller's age or if their health has changed. Giving blanket financial advice without knowing any specifics about the callers situation is incredibly irresponsible. It makes for good bumper sticker slogans but bad financial planning.
Dave Ramsey is great for getting out of debt but not for building serious wealth. If you want to retire early he isn’t the guy.
By all means, tell us where he is wrong.
Whole life is garbage
If david ramsey got licensed, he would be in trouble with the department of insurance for lies.
Jonathan Codispoti
We was fuly licensed at one point or another. He dropped them all cause he didn't like the politics. He now freely speaks the truth.
John L Yah a bunch of whole life bottom feeder salesmen always comment on his videos with hate lol
If he was licensed, I'm surprised he never mentioned doing a 1035 exchange. Which would get this caller out of the policy and avoid getting slammed with taxes and keeping all of his money. 1035 exchange would allow the caller to take his cash value, transfer it into an annuity.
@@ReplayOp82 I'm new to this game. I thought 1035 exchanges were for real estate. They can be used this way?
OMG! Dave Ramsey you have given this guy the wrong information on Whole Life Policy. You should be subject to FIDUCIARY guidelines for giving people financial advice. I personally have a whole life policy, its earning guaranteed rate of of return ever since I had it and its TAX FREE. I can see why financial advisors give you a bad rap on your show.
Refuerzo Group "its tax free" no it's not, you paid income tax on it when it was your income. If the growth is tax free that isn't any different than a Roth retirement account. Unless you have completely maxed out retirement options it wouldn't make any sense to have a whole life policy for tax reasons; and even then it's questionable.
The sense is that Roth investments come with RISK! Not everyone is willing to risk their money. Therefore, there is plenty of sense behind these types of options. In addition, a ROTH only pays out what you put it in. A life insurance policy will pay a death benefit which will likely be substantially more!
Juan Perez imagino que hablas español, dado que veo tus comentarios bastante bien fundamentados, asumo que eres agente de seguros. ojala pudieramos ponernos en contacto para resolver algunas dudas.
Claro que sí, Jose. Cualquiera preguntas que usted tengas o dudas, yo haré lo más posible para resolver. Información es la meta. Con la información adecuada podemos tomar mejores decisiones. Si quieres, me puedes mandar un mensaje privado.
Wow, you are correct about the Fiduciary guidelines. Dave can say whatever he wants, with no accountability.
Dave is so so wrong on this topic
That's all you got? Can you at least be more specific and sell me on Whole Life insurance?
@@astroman30 I don’t care to sell you anything 😂if you want to listen to a radio host for your financial needs go ahead
@@rustedbiscuits874 I'd rather listen to you. Tell me your advice when it comes to Whole Life insurance.
@@astroman30 to give you the absolute minimal response because I truly don’t care what you do, whole life is beneficial when you need life insurance. Whole life gives you the option to receive life insurance, while also receiving an average of 6% return (in this case built up equity that you can take out whenever). Whole life isn’t a “pure” investment. Simply allows you to have a safe and fixed income investment due to its return in dividends, but with the protection of life insurance
@@rustedbiscuits874 And how do I get money out of that "equity" that I'm being charged for having?
I feel bad for that guy. He just took advice from a guy who didn’t even take a look at his policy. That’s just careless. I prefer a well structured IUL over a traditional whole life policy, but I’m sure the guy was still getting a pretty good return on his money - while avoiding any market risk.
What’s a IUL? Thank you
dave should look at it first. I suspect the guys insurance is already paid up. with the right designed product the guy could purchase additional paid up additions with zero cost. Depending on the insurance is designed and if the beneficiary to to a grantor irrevocable trust it could be very good. Unlike the old days whole life insurance isn't just for your death but an asset you can use while you are living. If the insurance is paid up.
no disrespect to dave but this stuff is beyond his expertise and falls into the realm of estate planning and protecting one's assets.
It’s all garbage. Quit lying to people.
Dow is down about 5,000 points.....actual return vs average return....day and night difference.....
If this is truly a whole life policy through a mutual insurance company he could borrow the entire amount (no taxes or penalties) and STILL RECEIVE INTEREST ON THE ENTIRE AMOUNT.
If Dave Ramsey were to really educate himself on whole life (not universal life) he could have helped this man put an amazing amount of wealth in his pocket. SHAME ON YOU Dave Ramsey your pride cost this man 5% x 120,000 = $6,000 per year forever.
Next you will discount me and say it's impossible to get dividends even if your money is borrowed. I will show you in my own policy.
The next thing you will do is delete this comment because it doesn't fit your agenda.
SHAME ON YOU Dave Ramsey
Shawn Crockett 😂
Shawn Crockett I hope , Dave help him?
BORROW as in you will be paying interest on your own money... ok so he would be getting 5% "dividend" and probably 6% to 8% interest on the borrowed money goes to the company one way or another...
Couldn't you more easily cancel the policy, take out the 120K, invest it yourself, and make more than 5%? What's the purpose of having the investment linked to your life insurance? If it's for tax reasons, why not just max out a 401k and IRA?
elchamo14 in a mutual company the owner of the company is...... you guessed it the policyholder. So you get to write off the interest that you pay to yourself.
I keep minimum cash in my checking. I keep my cash position in my policies. The macro rate of return on my cash position is excellent.
How does borrowing on the cash in your policies work
@@ddillard143 fill out a loan request. turn it in, 3 days later the insurance company direct deposits their money into your bank account. Then you pay it back at an interest rate. it's actually pretty simple.
@@paulstutsman yes I got it thanks
@@ddillard143 you're welcome
Why not just max out a 401K and Roth IRA, buy term life, and skip whole life? A 401k and Roth IRA are way cheaper and provide more investment options. And after owning the Roth for 5 years, you can withdrawal contributions tax free. Whole life is a terrible investment when you consider what the other choices you have.
401 k and IRA
What tax bracket will you pay in 20 years do you know
Plus no guarantee product s
There is. No guarantee
@@ROSAJCUEN if you use a Roth 401k or Roth IRA the tax bracket won't matter. Because growth and distribution will be tax-free after you are 59 and 1/2 years old and it will be tax free for your beneficiaries. And they can roll that over into their own Roth tax free. Generational tax-free wealth
@@ddillard143 yeah and if you need a distribution sooner then you just took a 10 percent hit. ALSO your assuming the portfolio will perform well. Mutual Insurers that are winning have super stable growth rates. See this is the thing, there needs to be actual degrees and responsibilities involved with talking about this. Because its clear that most people dont know anything about how this works.
@@matthewhamilton4962 well you get a hit whether it's a Roth or it's not a Roth. And performance again is up for speculation whether it's a Roth or not. But it is a safe bet that taxes will be higher in the future than it is now. So so paying tax now and having tax-free growth seems to be better than the tax-deferred
I don't think that's correct. If you have 120k face value and 135k cash value there are companies that pay out both. Or at least in Canada.
Also if it's a whole life policy, there is likely a dividend being paid (either back to the client) or back into the policy. If he's paying $1000 a month into the policy and he's been paying for 10 years the dividend ,as be around $800 a month. This is something you'll want to check before cancelling. Around year 14 dividends should be around $1000 a month based on this example. And every year after that the company will pay you more than you put into it.
To be clear I'm not saying he should or should not cancel at this point. He would look into the affore mentioned and then make a decision based on numbers, NOT BASED ON EMOTIONS.
It seems like the gentleman who got the deal, didnt got it from a good a source and didnt took his own assets, demographic and life into consideration before maing the deal.
Where can I find more information about this?
Everyone tries to call Dave out. Yet not a single person in these comments can lay out a logical argument to refute Dave's rallying against WL and IUL policies.
Right! I'm reading through these comments and most of them say "Dave is so wrong about whole life!" But I haven't found one yet that points out what's wrong with what he said. I think it's just a lot of people who bought whole life and don't want to admit they made a mistake.
@@mroberts566 I think wl is okay if it's the only insurance you can get or your 5mill + maxed out retirement like he says. It sounds ultra conservative and you might as well invest in bonds instead and pay less in fees and make a little more.
That's why you find an IUL or a fixed index product and take a loan rather than a withdraw so it's tax-free! Simple.. not to mention you'll be covered for life and pass on wealth to your family. Why is that bad??
wow, you don't tell him he can borrow against his account?
I was just thinking that
Why would he borrow again it?
You mean borrow his own money???
Chris - Yes, pay to borrow his own money. Right. Lol. BTW, I'd rather invest via 401K which allows you to borrow as well...if borrowing my own money was the objective.
Red Chevy The point is not merely to barrow money from yourself. You split each dollar into $2 that’s in your CV and you make money on both ends. If you look at the surface you get surface results. Do the math everyone 👍🏻
Dave doesn’t like to be called out when he’s wrong. Which is quite often.
I cannot believe what I'm reading here....
Everyone has a biased opinion and for that reason I never ask anyone's opinion not even what they thought about that new movie that came out in theaters. I don't want anyone's biased opinion to skew my own judgement. It comes down to the individuals needs and knowledge level. Educate yourself and then you can make educated decisions. Don't ask other's opinions because if you ask 100 people you will get 100 answers. Then all you'll be is confused and skeptical. Do your homework and make your own opinions and decisions.
Listen to all, follow none
I love how this guy just gives out advice without knowing ANYTHING about the policy, the caller, and apparently, anything about Whole Life insurance! There are policies that give you cash value PLUS the death benefit, so this guy is not someone I would be taking advice from!
Who said insurance is an investment? Insurance is insurance and it builds savings that you can use for emergencies. Call that man and ask him how much he has now after the market crashed. Those 120 k sounds good right now don’t it?
And just how do I get money out of my cash savings? Oh, that's right, I have to BORROW against my own money paying it back plus interest. GTFOH.
What if become hurt or sick and can't work?......no income.....no disability insurance.....bye house,car....hello homeless shelter....
Disability insurance.
Not being in the room I wonder if the clarifying question off camera was asked what kind of Whole Life Insurance policy this was... Dave is right in saying MOST Whole Life Insurance is a waste, but what if the guy had a Dividend Paying Whole Life Insurance policy? Dave's answer would be terrible in that case. Just wondering
A dividend WL does the same. The dividends are "reinvested" into the policy. This increases your 'paid up insurance.'
Paid up is how much approximately you've put in.
The accumulation account is a percentage of the paid up insurance that is allowed by the company to be loaned.
You don't get both with a whole life and IULs are more expensive when you "choose" to receive both death benefit and retirement account.
Also most WL/UL policies will lapse before maturity if you don't increase your monthly payments. The premium per month with a WL/UL increases yearly WITHOUT additional notification.
So in 20-30 years, depending upon your policy and how much you can afford to put extra into the policy, the policy could be lapsed when you go to retire.
Then that's not including the fact you are borrowing your own money from the insurance company WITH interest because it is a loan.
It is your money and I think saving for the future is most important. So I wish everyone nothing but the best.
Have a great day!
Term TERMINATES Whole life is permanent. Only 2% of term policies ever pay out ( Usually, you out live the term) as to where 100% of whole life pays. After his term is up he will be older and he will be rated on that. Listen pal, If you want a policy that will for sure pay, get as much whole life while you're young and health. You wanna invest? Nobody is stopping you. This whole "buy term and invest the rest " is BS. First off, you want something designed to pay on your death. you must be very disciplined to invest. YOU WILL SPEND THE MONEY. LIFE HAPPENS! You want a life insurance policy where your family walks away with absolutely nothing? Do what this guy is telling you. You want a policy that will pay? Keep your whole life. If you have a family that you would like to protect then have "SOME" term. But don't get rid of your Whole life. One day you will need it. why not have the most you can afford now while you're young and healthy. Bottom line....would you rather pay for a million dollar policy that your family will likely never see or would you rather have $50,000 that is for sure going to your family. USE COMMON SENSE!!!!!This guy is acting like term is a disease. He must work for the insurance companies cuz they love putting you in policies that they likely will never have to pay the benefit. How do I know? I own an insurance agency. So, you wanna tell your spouse you got a million dollars in term, great! One of 2 things is gonna happen. 1. You are going to commit suicide a year before the policy ends or your wife will be poor when you die or your going to convert to whole life so that you can walk away with something. 2. you will keep the policy as is and it will totally destroy your financial situation. Your golden years will be the worst years of your life. In the end, you just wont be able to pay anymore.3. You are going to meet with a sudden accident where your wife will be the main suspect,lol. Anyway, I don't know who this guy is but the way he talks about whole like, he acts like its a disease. I assure you that you will not die from a whole life policy. Term...Not so sure. BTW, if you want a term policy where we give you back all your money. Give me a call. 941-302-5409
What kind of term policy is that?
Whole life insurance is the BEST INVESTMENT for your future! It’s not affected by market crash. Sorry but Dave is uneducated on the whole life insurance. With whole life, when the insured die, not only you get all the investments and dividend, but you get the death benefit. Dave is mixing term life insurance vs whole life insurance.
Cewek Boston you don’t get the cash value
John Waithaka oh yes you do on whole life, you get a rate of return that eventually will be enuf to pay the premium. You don't get cash value on TERM LIFE....I’m talking WHOLE LIFE.....know the difference 1st before you responding to me.
Whollllle lotta angry whole life insurance salesmen in the comments hahahahahah >:)
Dave Ramsey isn’t even licensed.
He sells term on his website.
I used to think he was so intelligent & helpful.
Truth is, he is benefitting off terrible advice about whole life. He should be saying, “If it’s with Northwestern Mutual, it’s probably the best policy you can buy, and worth it.”
Says the whole life insurance salesman.
@@astroman30 Key here is “licensed” AKA educated, AKA fiuciarily tasked.
@@Makemericher Great....you're a "licensed" thief. Congratulations.
It’s amazing how Dave gave advice and misinformation with absolutely no details or information on the callers financial position, liquidity, estate, company or product illustration providing the whole life.
If you called me and told me you were buying an overpriced product, I would say it was bad no matter your circumstances
Forced savings. 120k is better than having loss...
120k over 10 years? I would have made over a million easy.
I have a 500 dollar a month policy..... worth nothing right now. Been paying for one year. Its a mutual whole life policy. I feel like its a waste of money and my financial advisor keeps telling me I NEED it. I want to stop it. Should I? I already have plenty of term insurance..... I am a single divorced mom of three and havent a clue! I feel like Im getting taken for a ride.
Siobhan Kealy Drop it. It's better to have thrown away $5,000 now then to lose out on so much more in investment earnings over the life of that terrible performing whole life policy... Especially if you already have enough term insurance. It's your money, you make the final decision.
Ditch the policy AND the ‘financial (*cough* insurance sales person) advisor’
Absolutely stop that immediately. The agent will say you need it but it’s incredibly expensive . Buy term and invest the difference . Truly you need insurance because people depend on your income such as spouse and children . If you buy term the cost will be a lot less . For sure invest your money on a mutual fund or save it in the bank .
they should have told you its a long term hold. if you're not willing or able to hold 20 years, get out early. if your goals are long term wealth preservation, that would be different.
I do not know your situation. But I will say this. Do not become a victim of the term trap. Most whole life polices have a pop feature that you can stop paying and take advantage of the benefits a permanent policy has to offer. A term will only insure you for so long. Then what will happen if you outlive your term ins.?
Statistically everyone outlives the term Insurance only 2-5% of the people get to use it.
Don’t make any harsh decisions based on a video by Dave who is not even licensed not registered to talk about Insurance or investments.
Listen to your advisor ask him to give you a full detailed illustration with yearly details.
Be patient. Every bank in the nation has cash value Insurance as a form of investment. Search for it BOLI and COLI. Bank owned life Insurance & Corporate owned life Insurance.
You will be fine with your whole life you will reap the rewards 8-10yrs down the road.
Ramsey is wrong!
He's actually right
What about paid up additions?
Horrible product. Run Forest, run
More Bull
You have more cash value than what you have put in. There is nothing wrong with that.
You want to invest? Take a policy loan and invest, while all that cash value continues to grow.
Surrender the policy, you lose the death benefit, no more cash value for policy loans, pay tax on any gains beyond what was put in.
The growth in the cash value has no risks and continues to grow.
Mutual funds, real estate and just about any investment with any reasonable potential for significant growth comes with risks and no death benefit.
Dave Ramsey is proof that an old dog cannot learn new tricks. Once an older mind has established a mindset, that thought process won’t change no matter how obviously it might be misinformed. :(
And, what happens to all that cash value when the person dies?
Whole life saved my life its a financial pocket. You want more pockets
My pants have plenty of pockets already, I want the money I invest to earn a decent rate of return...
Dave Ramsey has permanent insurance himself.
If you take out more than the interest to cover you will lose out on both .
This is one of the most irresponsible videos when it comes to financial advice I have ever seen. Dave doesn't even know what he is talking about. First, he is comparing the whole life policy to an investment.
I think I am going to make a video exposing the many lies in this video... Licensed people who would give this advice without knowing the full picture of the individuals financial standing would be fined, lose their license, and be liable for the negative consequences this poor individual will likely endure.
I always just sit here shaking my head asking myself, "do people really buy into this stuff with Dave?" I guess the answer is yes.
Just because he helped you get out of debt, does not make him the person to help you save and plan for the future. I PROMISE he did not make his wealth following his own strategies... He built a business. He is a brilliant marketer. That's how he did it. How do people not see through that?
Make your video. I'll put it through the ringer just like other videos of people claiming Dave is wrong. Let me ask you something. How do these companies make money if everyone can pull out everything they put in at no penalty how can they make money? Oh thats right there is a charge to use your own money which is why these things are bogus.
@@teamtakeover7317 That's actually a very short sighted perspective. Life insurance companies use a general account for whole life. That's not the case for IUL's, which I why I don't like IUL's. But with a general account, each policy holders money goes into the general account, which is where the insurance company invests. The dividend is paid based on the return of that general account. Because most insurance companies have been dealing with bond markets for decades, a portion of that general account has bonds that are performing at a much better rate than current levels. IE: A 30 year bond in 1990 paid much higher than today. That's how they can get the results without the risk.
To answer the question on borrowing and paying to access your own money...that's a falser narrative. You are not paying to borrow your own money. You are actually getting a guaranteed loan from the insurance company. They simply use your CV balance in your policy as collateral. Here is the thing, when you borrow $100,000 @ 5%, you still have that 100k earning 5%. Do the math. It's all about compounding. It starts off as a wash loan, so on the surface it doesn't look as attractive.
However, Year 2 is when the loan payback begins to work. Because now we are only paying back money @5% interest on the lower balance (let's call it $100,000 assuming you paid interest only). While you are doing that, your policy balance increased by the 5% dividend to $105,000. Do this over several years and it get's better and better. You can't argue the math.
How do insurance companies make money? Well sure, they make about 1% or so off the general account. Tell me how that is any different than a mutual fund company charging 1-2% for management fees.
It's laughable how short sighting Dave's advice in this matter is. He should stick to debt elimination....
@@LIFE180 Bravo!!
Whole Life vs Term Insurance. I have both!
Why both?
@@STeroidsnicca probably to afford death benefit!
So if you have $500 k whole life insurance policy and you only deposit $200.00 a month into it, then you should be fine?
I am lost here!!!
I mean as long as you don't invest more than face value into it then you should be fine?
I don't understand these products.
I'm no expert... but I believe that whole life insurance is premium product. So you'd be paying closer to $2k a month.
In any event. Let's say you pay $24k per year... to get a $500k policy. With interest that will be around $500k you've paid in 15-20 years time. And now your cash value is worth more than your death benefit. I think what they are saying is, when that happens its better to take the cash value.... because your family will only get the death benefit and not the cash value.
I looked at one today, the cost for 500k was $400 per month. A smaller portion of the $400 is paying for the 500k life insurance and the larger portion is building cash value. In 10 years, the cash value is equal to the payments you have put in. You can pull money out anytime. The interest rate was 7.5 or higher and guaranteed not to lose money in a market crash, etc. The cash value is paid on top of the 500k death benefit. Supposedly the money growth is tax free on the plan I looked at. It gets more interesting if you elect to put in a lot more money on top of your premiums and get compounding growth. If you stop making payments, your life insurance will continue by drawing down a small portion of your cash value. Didn't sound too bad.
Or you could get a 30 yr-term policy with a face value of 500k costing $75-100/mo (if not less than that).
--Take the difference (Your $400/mo policy - $75 to $100/mo.) and invest that $300-325 in a tax free vehicle that could yield a conservative 6% guaranteed growth and end up better off after 25 years.
--After, 25 years you would still have the 500k policy in place and full control of whatever investment vehicle and it would be worth anywhere from 197k ($100/mo policy) to 223k ($75/mo policy)
--If you die with the Whole Life Policy after 25 year you get the 500k and lose whatever cash value you had to the insurance company
--OR If you die with the Term Insurance scenario you have the 500k from the policy and the 197k-223k of money that you had been saving on your own (Total of 697k - 723k).
Buy Term and Invest the difference.
Littlebulldog88 please tell me what vehicle will give you that return without market risk ??
Why would you be concerned with market risk if you leave the money alone? Volatility is only an issue for emotional or non diversified investors.
Why would they do that? 12,000 a year in case something happened to you? Just keep your money and the people around you will be fine
Cause its somewhat of an investment but seems as though the insurance companies profit the most from ur money
Because if you keep the money you're losing 2% of the value every year from inflation. So you have to invest it into something that gives you at least 2% to even out
I have dividend paying life insurance policy and it works really well. Not sure where all this hate come from. It's a great vehicle for a lot of individuals.
Life insurance is an overpriced side bet on death
Respectfully saying, I don't this can be taken as financial advice because Dave never once asked what was the purpose of the life insurance policy. There are whole life policies that are worth paying $1,000/month for; especially with the right mutual life insurance company.
Well said
I have an IUL structured with a low death benefit and the excess going into investments. Its how the policies are structured. I am 5 years in and my cash value is far exceeded what I put in. After 10 years it will grow even more tax free. But whole life and IUL should be supplemental to your investments after you max out 401ks and IRAs.
I like Dave Ramsey but he gives terrible investment advice on these because I think he doesn't fully understand how these insurance machines work.
35 year old millionaire here.
And, what happens to that "cash value" when you die?
@@astroman30 the cash value is the present value of the death benefit that the company allows you to collateralize. They are not two separate things. When you are looking at your cash value balance, your looking at how much of the death benefit the company will allow you to collateralize today. When you die, you will get the whole death benefit that encompasses the cash value
@@jaredkuhn8116 Have you not seen the charts by your other thieves in this profession here on youtube where they demonstrate how the CV builds and gains interest? How the consumer/victim can "take money out" and use it to buy houses like in (IBC) Infinite Banking? They give a very detailed job of demonstrating on how to separate and show the "benefits" of BORROWING against your CV. You stating, "They are not two separate things" is hilarious. Perhaps, you should congregate with your other weasel salesmen in your "profession."
@@astroman30 lol just because I happen to be educated on the basics of how a whole life contract works doesn't mean I'm in the profession.. I've been active military since I was a teenager. But the cash value has to equal the death benefit by the time your 121, and if you use PUAs to buy more death benefit the cash value has to rise even faster to be on track to meet that new death benefit, so it does consistently grow. IBC works very well but your not understanding some of the basics. The cash value in the policy is not your money, it's the company's money. When you pay your money to a company to increase the cash value the ownership of that money goes to the company forever. HOWEVER, the contract states that you as a owner has absolute control over present value of the death benefit, or cash value. This means that you can have absolute control over however much capital you want by being in a contract that uses PUAs to keep buying death benefit and therefore keep increasing cash value. So it's really about control more then anything. Not alot of people can work up to the point where they have absolute control over hundreds of thousands of dollars that doesn't belong to them, yet they can deploy it in any way they please... except for those evil banksters that can print money out of thin air, lend it to us and force us to collateralize assets like our home, then take everything away from us when we don't pay that made up money back on their terms.. this solves that
Oh Dave, this is sprinkled with half truths and incorrect assumptions.
Dave is actually right. Anyone can research and see he is right. Whole life absorbs your cash value if you die and only pays the face value. Google it.
@@JohnBowl14690 the idea that cash value is separate from the death benefit is incorrect. The cash value is your equity position in the policy.
@@isajthereable - Yes, which is separate.
@@isajthereable - Oh wait...it's separate AND together. You pay together, but if you die you only get the face value and the insurance company keeps your cash value. Yes, it's a sucker policy, but yes...it's both separate and together.
@@JohnBowl14690 actually when you pass away, the cash value graduates up to the death benefit. I can understand why listening to Ramsey makes it seem complicated. I am talking about whole life. Not indexed universal life. That's Wall Street nonsense.
Life insurance is an overpriced side bet on death.
Wow thank God daves not licensed he alot of advise with very little information stare clear of these guys they can hurt you with no responsibility on there part.
he did not know what they were going to send him so it is hard to figure out if he got a good deal or not but if he gets all of the money he put into it doesn't that mean he got free insurance for 10 years minus the time value of that money.
I doubt he is getting 120k back though
In a 10 year window, probably not. most whole life take 13-14 years to break even cash on cash. Anyone who doesn't understand this when buying was sold a product and was not properly educated. However, if you look at the IRR of a properly designed policy over a 30 year window, you're looking at a 5%+ IRR, with no risk of loss, and all tax free.
I have " NEW YORK LIFE VARIABLE UNIVERSAL LIFE ACCUMULATOR PLUS " and paying 500 months and I'm confused what dave say
nassi ben It looks like you have Variable Universal Life insurance. Open your policy and look for the tabular illustrations. There are usually 3 illustrations, guaranteed, medium growth and maximum growth. Check the column where it says Cash Surrender Value and scroll down. You will see that it will eventually become 0.
Cancel it.
This was the worse advice ever. Ramsey said 90 % of them don’t make money, then the caller said he did make money. Shut Ramsey up. He had to retract and say yeah you will pay on the access. As an agent I would advise not to do that. You will pay taxes. Life Insurance is suppose to be tax free and your agent will tell you how to get the money out without having to pay taxes on the access. First off turn on income feature and start using it as income. That way you still avoid the taxes. If you the full amount yes you will pay taxes on it. Speak to your agent about your options. He will clearly have you lose your shirt when it comes to this.
And, what happens to that cash value when the person dies?
Are u supposed to get money back if you cancel a whole life insurance.
It breaks my heart that people will accept this answer he gives as legitimate, and not find out the truth instead.
With the comments so polarized I doubt anyone will be finding any actual truths, unless they take a good luck at the context of their own lives and see what fits in this whole deal or not, but one thing is for certain I´m curious to know how much that man earned monthly and if he had a house and a car at the very least, because if he had those things I dont see why he´d need a life insurance.
He should stop payments and use dividends to pay the premiums
He should cancel the policy and get his cash value out.
@@astroman30you should cancel your term.. 99% no pay out..
Dave always makes it out like the bank or insurance company is the bad guy. Keep in mind that he has been using the product: he had coverage. It isnt a CD where they just borrow the money and expect it all back...The point of insurance is to make expenses more predictable and give peace of mind, not make your money back. If you dont use your health insurance this year are you going to get mad because you spent more than you got out?
Taming Wall Street by Stephen Gardener. Read the book! Stop following what others say .
I love Dave, but he’s wrong here.
Depending on how an agent structures your whole life, you can keep the cash value AND death benefit.
Chris Alters then how would the insurance company even make money?
Debajit Dasgupta great question, there’s actually a cost of insurance that’s included with your monthly savings. The COI is for the death benefit which gives you access to your cash value tax free later on. I specialize in IUL’s so there’s a guaranteed 0% floor and cap. Anything past our 15% cap the insurance company keeps to compensate for when the market crashes.
Chris Alters and your cost of insurance goes up every year which will eventually be more than the premiums you pay in every month. Thus the COI will start eating away your cash value until it lapses, then what?
Rommel Bautista COI gets aggressive in late 60’s / 70’s so the point of the product was to retire before it gets too high, and nearing retirement the agent (should) doesn’t always happen, decrease the face value to compensate / lower COI
Chris Alters so it’s not permanent insurance like all agents suggest. It’s just a very expensive term insurance.
Dave Ramsey is just for middle class
Theres a LOT of things this guy does not mention about life insurance, if this guy continues to put in 1k a month he WILL eventually be able to make his money back plus more, he is only paying it for 10 years, after that period the money will continue to accumulate interest plus dividends, if it is used for retirement income he will easily double what he put into the policy. I doubt Dave fully knows what he is talking about, take it from a licensed life insurance agent.