Is Whole Life Insurance Ever A Good Idea?

43 Comments

1. 1% of term insurance pays a death benefit, but protecting your family while you payoff your mortgage is important. Whole life pays 100% when the premium is paid untill death. Plus your family is protected forever. Income Savings, investments, winnings come and go. Permanent life insurance is there forever.

2. 1. Anyone who says universally that any financial product is not suitable for anyone under any circumstances can’t be correct.

   2. If you put $100 a month into a savings account for 5 years you’ll have roughly the $6000 you put in plus a few dollars of interest. If you were to die the bank will give back what’s in the account to the beneficiaries. A life insurance company will keep the cash value, but pay out a death benefit, so I’m not sure what that’s a bad trade off.

   3. From an investment standpoint, there are plenty of investments that have no access to your principal for a lot longer than 3 years.

   4. As cash value increases with dividend earnings, the death benefit actually increases.

   The point is that Whole Life Insurance is for a specific need. To pay a guaranteed death benefit to the beneficiaries of an estate. It also has a cash value component to it with access to it during your life time. It’s not that it’s a bad product, but the points he’s highlighting here make it sound bad, when the right answer is it’s good for a specific need.

   Term insurance is a temporary solution to a temporary need. For example, someone who dies with an outstanding mortgage or debt. Term insurance is good to cover you the years that debt is outstanding but eventually your mortgage will be paid and you don’t “need” the insurance for longer than that. Or for someone who has young children. A term policy to replace your income if something were to happen when your children are young, but once they are older and on their own two feet you don’t “need” that insurance anymore.

   These are just some of the insurance concepts out there and what types of policies are suitable for what type of financial planning and protection objectives.

3. I sell Final expense whole life, well I broker it, and from helping hundreds of families I can tell you 1 thing. The majority of these people need to be protected against themselves. They have ZERO capability or restraint in setting $ aside for final expenses that they won’t touch while living paycheck to paycheck. The insurance protects them from having temptation to really touch the whole amount.

4. my mom recently passed, I know that she had a term life policy as well as a whole life policy that was there to cover final expenses.
   turns out my sister was in charge of her finances the last year of her life and decided she did not feel like paying either of these policies so all the money my mom invested into the term life policy was gone with nothing but at least there was a cash value in the whole life policy that we were still able to use for her final expenses.
   so yes, I understand as an investment it is a really stupid investment, but as an insurance it's expensive but at least it guarantees you a payout of at worst, the cash value.

5. Dave continuing to promote his own insurance company by rage baiting everyone about Whole Life insurance is pure genius. "I'm here for my listeners, not you." I like Dave and he has a lot of great points regarding personal finance. But comparing permanent life insurance to investments is hilarious, whole life insurance is NOT an investment vehicle and does not operate like one. He might as well compare his fruit jar to investments returns. Understand, I am not defending whole life insurance, but it is deceitful of Dave to prop up a concept that most people are not familiar with, inaccurately, to promote a company he owns. People please do your due diligence in everything you put your money into.

6. I’ve never heard Dave give good advice.

7. I’m one of those fools that bought it. I’m still paying on it. It will be fully paid in about three years. My cash value will catch up to what I put into it at that point. Should I just keep the policy at that point or should I take the cash value and run?

8. I just looked through a slideshow that northwestern mutual sent me years back, when they wanted to invest my money for me and sell me on whole life. I went through a few meetings and knew better than to do any business whatsoever….but after learning more about whole life from Dave, I'm even more grateful that I didn't buy into it.

   "Term life is like a rental, Whole life is like buying a home"

9. If you are young, married and have kids and your work does not provide life insurance, then yes term life insurance makes sense. After the kids have graduated college and out on their own, drop it. Invest what you would spend on the premiums into the market, if you’re not savvy just put it in Index mutual funds.

10. Things he didn’t mention that I’d be curious how he’d address:

    -Cash value is not zero for the first three years for most products, that’s actually a lie
    -mutual companies offer policyholders dividends, allowing for policy offset at a defined point in the policy—meaning you don’t have to keep paying if you don’t want (usually 10-15 years), and your policy won’t lapse.
    -Long-Term Care insurance can be added to Whole Life in most states for a fraction of the cost of independent long term care insurance—which bankrupts many people.
    -the death benefit of whole life increases over time as cash value compounds like any other investment, which he didn’t mention, and even seemed to say that it disappears—which would be untrue.

    I don’t think whole life is a responsible financial choice for the average person living paycheck to paycheck, or drowning in debt, but to act like there are NO circumstances where it makes sense? Not even a small amount for a specific purpose? Okay Dave.

11. Wich terminal the bank of england Gatwick East Midlands Glasgow Airport Birmingham Airport Heathrow Airport the terminal running the lightning bolt that fried the plane with us on it the terrorist stolen from the twin towers when my pain was attacked

12. I was electrocuted raped crashed experimented on bitten food poisoned i have piles anal tiers i suffer with fits from the candy bowl electric shocks i was tied in a rope not and threatened to be pushed over the edge

13. My finger is crushed broken cant move my hand properly i was taken against my will and abused by a pikey

14. Dave braggs about being worth hundreds of millions of dollars and anyone with common sense knows that there must be a huge profit margin for him to make this so who is screwing who Dave😂

15. In this video Dave relies on mathematics as he states but then in other videos he states don't pay attention to the mathematics when it comes to paying off a higher interest rate than a lower interest rate first😂

16. I had a whole life policy that my company paid half the premium and I cashed it in when I retired. Worked out pretty good for me. Just saying.

17. WL can be a great asset, dave will just never admit it. How can you call yourself a fiduciary for your audience and say one asset class is better another when its highly situational. WL can be great for some people but it can also be a bad fit for some. Dave a such a tool. He will also never have a honest conversation about permanent insurance. Term insurance companies are sponsors and pay him tens if not hundreds of thousands a year for dave to push term. Huge conflict of interest but insurance salespeople are the baddies 😂. Ok dave.

18. 5:14 is wrong at least for me. The cash value plus the death benefit is added together. After he said that I looked at my account. I still agree it’s a bad deal but he was wrong about that.

19. I love hearing Dave rant against life insurance as an “investment “. I would never trust an insurance salesman who pretends to be a “financial advisor “.

20. Pass the gruelling actuarial exams first, otherwise listen to someone who has, such as Scott Witt (he has several videoes on YouTube). As a math graduate myself, you need some pretty advanced math to pass them. A well-designed 90/10 life insurance policy has many advantages, but advanced math is not needed to understand why. Scott explains it in his videoes. He is a fee-for-service only Actuary; he has no interest in pushing any product, since he doesn't sell any or receive commissions. He just advises clients. However, if you want to rubbish them, I think, at a minimum, you need to be qualified as an associate actuary. BTW, actuaries are so good at what they do; less than 2% limited life policies ever pay off, but they do have their uses.

21. And this is why I trust Dave Ramsey. Straight to the point.

22. What about a corporately structured whole life policy for a company funded by it's retained earnings?

23. 95% of term policies don't pay out

24. What would you recommend to put $100k to protect it from an economic collapse of the dollar?

25. 6:05 Dave Ramsey is NOT a consumer advocate. If he was, he would completely dissolve his SmartVestor Pro advisor network and tell people to just buy low-cost index funds through a company like Fidelity, Vanguard, or Charles Schwab. Also, those advisors have to pay Dave Ramsey a yearly endorsement fee just to be included on his "Pros" list. That right there is a huge conflict of interest.

26. I am no fan of whole life insurance, but I find it funny how Dave is complaining about the high front-loaded heavy commissions they have, yet he is constantly advertising for his "SmartVestor Pro" advisor network program which charge a high front-end commission of 5.75% or they do a 1% AUM (Assets Under Management) fee every year, which can really eat into your returns over time. The vast majority of people don't even need a financial advisor. They can invest on their own and buy low-cost index funds that don't have high front-end commissions.

27. Whole life pays out no matter what. Term life pays only if you die during the term. Only 10 % of people die during the term limit of the life insurance policy. Just saying the math isn't so simple as it's described here.

28. "For the same amount of insurance" is not really fair — you are getting much more insurance with Whole Life because it lasts… your whole life! Dave recommends cash emergency fund. If you roll your HYSA emergency fund into a 10-pay WL policy, you'll have a little less money up front and more in the end.

29. It’s a bad deal but, it does force someone who is not a good
    saver to save something on a regular basis!

30. 2:33 "Mathematics are pretty simple"…..proceeds to fail at mathematics. 😂
    "100 times more expensive"? Oh wait "20 times more expensive"? Uh, $5 is 1/4 (25%) of $20 so, um, maybe he meant to say 4 times more expensive?
    Dave Ramsey……not a math guy, but still correct!

31. Let me understand. I have a properly structured IUL policy that has an avg return of 6.9%. I can borrow on the cash value at 5%, a washout loan. I can put millions in the policy, use it as a pension and death benefit with no taxes or penalties taking out loans after loan after loan. Even when the markets lose big, my cash value is safe, it’s guaranteed. Or I can put my money in the stock market, a $35 Trillion in debt and political chaos and have a nice retirement savings. I don’t need to worry about losing money in the stock market. Good luck with your stock options everyone. 👍🏼

32. 1.2 3.6 %

33. Wrong. If you buy basic whole life and have no idea how to structure it. There are more carriers who does well selling it and cash value grows with death benefits. Its not correct.

34. I mean there are whole life programs that have 95% cash value available in year 1 Dave — you need to do some more homework

35. He’s saying Whole life is bad because he sells Term life from his ELP program

36. Comparing cost for permanent insurance to term is very disingenuous, the reason why it is 20x more expensive is because it’s Guaranteed to pay out. Where as 98% of term don’t pay out because people live past the term. You cannot compare a term which will only have a 1-2% of payout to Whole life or UL with a 100% payout. You cannot get Term past 75 in most places

37. Thanks for the information

38. What about cash value whole life insurance policies that are put into irrevocable trust

39. I’m new on learning from cv life ins.. but the words coming from this bald headed chipmunk is hilarious. He’s not for the middle class building wealth. He’s for the middle class budgeting to get out of debt. Nothing notes.

40. Also, the IRS limits how much you can fund a permanent policy with in the 1st 7 years. I wonder why they would care? Perhaps because of the ability to avoid capital gains taxes? Hmmmmmm.

41. Remember that ole Dave is giving financial advice…..without a license to give financial advice. He does the same with taxes. Oh, and btw, he'll tell you that MLM is ok. Brilliant!! I guess it all depends on who his sponsors are, huh?

42. What about the percentage of term policies that actually pay out vs whole life policies?

43. So what should I personally do to ensure my family is ok after I'm gone? I just lost my dad and now my mom and sister are in a hard way?