Wait, wait, wait..... you mean they didn't write the policy up "correctly" so it would pay like the insurance guy here say they can?!? Say it ain't so... Sorry to hear that, there are slimeballs in every industry, insurance is no exception.
@Sona Falk ONLY BUY TERM LIFE INSURANCE. Anything else is a scam. That's all you need to know. Don't let the fancy jargon confuse you..... variable, whole life, fifth dividend, blah blah blah.
@TaKing Lives ONLY BUY TERM LIFE INSURANCE. Anything else is a scam. That's all you need to know. Don't let the fancy jargon confuse you..... variable, whole life, fifth dividend, blah blah blah.
Dave Ramsey gives advice to poor and middle class people . That's his target market. Of course WL isn't a fit for those people... common sense. Wealthy people don't listen to dave and suzy.. so it's important to be careful who you consume content from , depending who you are. Also apparently Dave Ramsey owns Whole Life himself... :)
Whole life insurance are better for agents to sell because commissions,.. for 5 to 10 years premiums that people pay are for administration fees and not the policy itself, you can borrow against it but you have to pay interest in it
Dave should have asked him what his commission was on a 250,000 20 year term policy versus a 250,000 whole life policy. That will explain why they sell whole life
I was an insurance salesperson for State Farm, briefly. The commission was not for fire or auto, only life. What a joke. Clearly a valueless product for the consumer if they are willing to share the money. Fire and auto, no commission, only hourly wage.
I've been an insurance broker for years and worked with 30+ companies and I've not heard of any company that will even offer 250k on a whole life policy. In fact, leads for people who want term insurance tend to be more expensive because insurance companies will pay higher commission for those products. To some degree, they are both right. Whole life doesn't make a ton of sense for people who can get term. However, term is NOT 1/20th the price for somebody who is retirement age or older. Most term products are strict and most people of that age can't qualify for them anyway. Seniors normally pay less into their whole life policies than their beneficiaries will receive, regardless of the cash value. Many carriers have cash back options that cost slightly more but will return 100 percent of all premiums payed back to the owner of the policy, so the idea that they are scamming people by stealing their cash value is frankly ridiculous.
@@rcdrury1 I’ve never seen it. Whole Life policies are typically for ages 50-85 and cap at $35,000. They are expensive because the life insurance company will almost certainly pay a death benefit at some point. Companies like Americo and Mutual of Omaha actually offer 10 percent more commission on average to sell their term product.
Charles Bronson I don’t like 10 years, theres no need to carry this much debt around that long. You can do better than that. I like a 8 year goal or a 6 year goal better. Take a weekend job to make ends meet if you have to.
Well if he got us out of debt that quickly you most likely wouldn’t receive social security or Medicare, the military funding would be cut, college students wouldn’t receive loans(probably a good thing), we’d have to raise taxes on large corporations resulting in unemployment. It would be a mess but once we’reout of debt everything will hopefully be given back. Dave would have a few tricks if he became president
I find it very interesting to hear Dave get challenged and respond on the fly. That's where you really realize he knows what he is talking about. He should do that more.
Yeah Dave really handled it well when the agent brought up the fifth dividend option in Whole Life Insurance. I think Dave was at a loss of words for a moment. Dave really doesn't understand insurance. The agent had a point.
@@ericgilliland6140 Which is what? That only people who understand insurance should buy insurance? Dave knew (and I know he knew because I knew - and I am not as well-versed) that the insurance agent was digging into "sales speak," which is the language used to baffle the more intuitive potential buyers into purchasing something that they really do not need nor will they ever get. It's ridiculous that the agent had to go down that road in order to try and baffle Dave into agreeing with him.
@@darthnocturnis3941 the point is that if Dave Ramsey doesn't really know or understand the product then shouldn't be offering a one size fits all solution about it. He blankly states that Whole Life Insurance is a rip off or a scam. The truth is that while Whole Life Insurance might not be for most people it can be used to benefit some people. There is no sales talk here. Whole Life Insurance serves its purpose in the market but it may not be for 90% of the population. If the average person doesn't invest the time to learn about these products then they should probably stay away and listen to Uncle Ramsey and buy term and invest the difference. For those who can take the time and learn the mechanics of a WLpolicy can take advantage of blended coverage with paid up additions and numerous dividend options. But I think we can all agree insurance agents are horrible.
I agree in many ways, but not the dividend driven product but the agents and the fact that all whole life is lumped together. There are many exceptions where whole life could be best for someone like when you deal with someone who just will not invest in the stock market no matter what and they got a mortgage late in life because they followed financial peace and focused on paying down all debt even though it may have been low interest and now they have a spouse who may get left behind without enough Social Security to keep up with the remaining mortgage. I've seen people take their entire 401k earning average 11% to pay off a mortgage that wasn't even 4% interest. They don't want their child to have to short sell house for cash if now they need long term care. People who know they have Alzheimer's in their family for example and they only have one child and don't want to be a burden to that only child. I've seen risk conservative people use instead of 529 even. I was shocked at how well it worked long term.
NaturalNikkiSmile a successful investment advisor does a thorough analysis of a client’s entire scenario- budget, debt, insurance, salary, age of children & short & long term goals. Unfortunately, I don’t see this very often as most take a piece meal approach & simply sell clients products without looking at the overall needs of the client. If a client is risk averse, it’s advisor’s job to educate the client on investments & their track record. Even a money market account would earn more than a whole life cash value.
Dave is spot on. My father had a whole life policy on my kids for 18yrs and when we tried to cash them out to help get my kids a car. It didn’t pay out anything close to its presumptive value.
We need more open debates like this. If Daves ideas are sound which i think they are. Then hold them up to scrutiny and see if they prevail. Debate like this is healthy and educational. 👌
@James H - Come back and check out my replies made today. I think I gave several and can give even more unfortunately based on experience when it didn't hold up. For the most part you have to be moderate to high risk for good 20 or so years maxing our your retirement or at least an IRA. I found people waiting so long to start investing to pay down debt that was like 2.9 - 4%. Or they following the rules but still moderate or conservative investors and trying to time the market. I know he says you don't have to pay down mortgages with good interest before starting to invest or save but people do. Then they retire and huge part of their cash is now locked into the house (non liquid). And they haven't benefited from power of compound interest.
@@naturalnikkismile1709 "For the most part you have to be moderate to high risk for good 20 or so years maxing our your retirement or at least an IRA" I very strongly disagree with this statement. 20 years of maxing out an ira at a very conservative 6% = $220,000. If it's a ROTH, ALL that growth is tax free. Realizing 9+% is not unreasonable and certainly does not require high risk investing. Even sticking away a small amount early on makes a big difference down the road.
I agree that more open debates are needed, but this unfortunately was not one of them. It was one dogmatic, close minded person talking to another slightly less dogmatic, close minded person. In this case Dave was the most close minded. It is true that well set up whole life policies are rare. That’s because most brokers don’t set them up from the perspective of a financial strategist. If you want to learn more, there is a lot of info about it out there. We are working through FPU right now and I agree with Dave in many areas. His dogmatic stances are great for getting on the path to financial freedom and reprogramming a person’s brain to think about finances differently. Beyond that stage of life, there are other resources out there that can serve a person better IF their intent is to build a legacy of wealth for their family. Along with the amazing resources Dave provides, a person should bolster their financial intelligence with multiple resources and take ownership of their financial future.
Lets say someone had 100k in money they wanted to go to their children. Say that person puts 100k into a mutual fund and dies 2 years later. Their kids maybe get 110k. Lets say they bought a whole life policy. Family would get 200k. You tell me whats the better deal
@@positivesecret This is common place, if you buy a whole life policy. But it also depends on other factors like how long you live and what type of insurance company you're buying from. If you're buying an insurance policy for yourself you'll want to look for a mutual insurance company because as a policy holder you are also an owner of the company and you get to participate in earnings. You probably think insurance companies make profits by charging premiums, they don't. Insurance companies generate profits by wise investments in the stock market, keeping them solvent and able to create products that give back premiums and dividends when the insured dies.
@@positivesecret i mean it's a little off because you don't just drop $100k into a whole life policy because there are rules against creating a Modified Endowment Contract (basically so rich people can't place huge lump sums into insurance to get the tax advantages), but let's look at it a different way: If you put money into an Indexed Universal Life policy (the newest version of whole life) and had a death benefit of $200,000, that's the case from Day 1 after your initial premium and the policy is in force. Now yes, insurance companies would not be in business if everyone died in the first 2 years, that's why insurance companies have underwriters to make sure they're not insuring people close to death. But let's say that you have a client who got insured for $200k and 2 years later, after paying $2,400 in premiums, that client died, then the family would get $200k. But, if you have $2,400 in a 401(k), IRA or other investment, it's just worth $2,400. That's why people who are prudent get insurance. I hope that makes sense. And yes, I am a licensed agent.
LOL Yeah. That's like saying, 'When the law is applied correctly, there is justice served' - But how many criminals get away with terrible things every day
@@Dflonn Any insurer can write them as such. I don't speak for others, but I wouldn't recommend it because I don't consider it an actuarially sound practice. Doing so would require additional premium to underwrite the higher death benefit. Think of it in the same vane as return of premium term. ROP term is typically thought of as a gimmick; a higher premium is paid than traditional term in order to underwrite the refunded premium. Actuarially, you're not money ahead by writing it this way.
I am an insurance broker myself. I started off in life insurance and within about 6 months I quit because of the things Dave is arguing. Once I saw it for myself and understood what this really was, I couldn’t do it anymore. Dave is 100% correct on everything he said
Who did you sell for? Because Dave was NOT correct, he was talking about a basic whole life policy sold by stock insurance companies. Stock companies sell the worse WL policies you can buy, your cash value accumulation is anemic. Mutual insurance companies work for the policy holders and the policy holder participates in dividends, so in addition to a Cash Value they accumulate dividends that they can choose to have distributed to them, or allow them to accumulate. Dave doesn't know this, that's why he talked down to Russ. Did you know, Dave owns WL policies? He said he keeps them because he's got to much invested in them riiiight.
Term with return of premium is a good product, but straight term only works for healthy people in certain age groups & situations. If you come across a person with mental retardation, congenital defects, or they have insulin dependent diabetes, they won't qualify for term. That's where whole life comes into play. Also, "used to" is the operative phrase.
@@str8Proud They are still ripoffs. I truly feel sorry for anyone who would buy something from that caller. Used car salesmen are perfect angels compared to people like him.
@@str8Proud Exactly. Dave has no idea how to utilize WL and is NOT LICENSED to be saying this stuff. He's taking advantage of vulnerable and/ignorant people.
@@ashleytaylor994 That's kind of the point though. The idea is that if you make it to retirement, your family shouldn't need an insurance payout when you die. And of course, it's not as if we can expect insurance companies to pay out $1M to everyone that dies of old age because that would be absurd and unworkable. I think people sort of vaguely have that idea that they can have that though, and that's how the scammers get their foot in the door.
Brandon Rudder can u explain why u agree with Dave? U sell life insurance, what’s the difference? What’s beneficial? What should I and millions of other ppl be looking for in life Insurances? What are the “terms”, what are the do’s and donts...
There is virtually NO commission from selling a term policy. You get paid exactly once (when you sell the product) and get no re-occurring income. A whole life policy pays an insurance broker every single time a premium is paid. This man is angry because Dave Ramsey is telling people only to buy something (from him) that doesn't even give him gasoline money to meet with clients.
to be fair, the end products for both have their advantages. Term is cheaper and with that savings you can do soooo much more for me, i prefer WL since the price can be LOCKED IN. i spent 3 years looking for life insurance. term is fine savings but at that rate, I'd rather die without any insurance. i need life insurance for my 50s and beyond, thats when term life, 30 year rate lock could be a viable option. but for me, a man in his 30s, I prefer the rate lock of my youth so that when I'm in my 50s, 60s, and beyond i wont have to worry about the rate increases every 5 years or even after each renewal period. theres so much mental gymnastics, with term. like it would almost be advantageous to get a 10 year policy THEN turn around to get 30 year term policy just so i could effectively get 40 ish years of the lowest rate/longest coverage. since technically 40s is still a die-able decade. (any age, but again, for MY personal POV, the younger I die, the less I would care about legacy crap. I dont have a wife or kid, so why leave money on the table for my mom, neices, nephews, and brothers. thats what their own spouse and parents are for.) my only prerogative as a young man is to ensure that I dont die in huge debts. 1) student loans die with me 2) auto loans could mean my folks would have to sell or pay off the remaining balance 3) credit card debt dies with me 4) if I had positive net worth then maybe my creditors would absorb it from my "estate" so, no, i didn't care for a Life Insurance Policy. mid 30s and onward, now I care since I have my debts in check. so for me, WL is better. to me, Term life is only good for folks who die before age 60 or have a rate lock for the full duration of their term, which is STILL ridiculous since a WL rate for anyone in their 30s or younger is way better than the term rates for folks in their 50s and older. (40s is a grey area)
Steven Johnson I know right. I get a lot of comments about driving in a 10 year old accord because I live in north Scottsdale, thing is, I own my Honda, they don't own their range rovers
Curious, why so? What is the point of paying off your house? It's the worst monetary investment someone can make. The only return on investment you get is 1. IF the the value goes up. And 2. IF it goes up in enough value, you have to sell your home to get any of that return. And the more equity you have in the home the MORE they can lend out. Banks can led $7 for every $1. So geuss what. When people try so hard to pay off early, then something comes up and they can't pay off their mortgage all that equity that's tied up, the bank can no longer lend on. So they forclose. I feel it's much better the pull out equity in your home and invest it in a better vehicle.
Did you think the cost to keep the policy in force was free??? If the policy up untill his death cost him 100k and you recieved 1mill, I'd say that was a wise investment. How much more greedy can you be? I bet you've blown away his death money ready because you're an idiot. If you were wise you'd buy more whole like for everyone in your family. Easiest way to create generational wealth.
@RileyCountyExtension even the insurance agent said that the policy holder has to set it up right to provide the additional gains, and it costs a bit more. If you choose to include whole life in your portfolio (a great way to protect money from being legally grabbed up by healthcare) you need to do your research first. Find out what "riders" are available, and compare companies at a third party site such as Nerd Wallet. You also want a _mutual_ insurance company. Most are publicly traded companies, out to make a profit for their shareholders. The few mutual companies treat their policy holders as share holders, and pay dividends accordingly. (And no, I'm not an agent.) With some due diligence, you can get a decent product, and in the end, when healthcare costs are eating away your fortune, and term is no longer affordable, whole life insurance will be there to help your family. How well it does so depends on your level of diligence in finding the best options. Agents won't typically do this for you.
Ponderdeep for the lay person, most wont do the due diligence nor have an idea if it is set up right. Insurance should be simple “one dies family is paid”
The only reasons I can think of are: 1) He wanted to capitalize on Dave's large audience and 2) he thinks he knows more or is smarter than Dave and thought he could win the argument. There are a lot of whole life insurance salesmen who hate Dave Ramsey.
MakennaXO, it's great, and it needs to happen when the host doesn't know the details of what hes talking about, similar to Dave and permanent insurance products.
A door-to-door vacuum salesman shows up at a house. The woman living there answers the door. The salesman produces his vacuum cleaner to sell, and a bag of dirt. He tells the lady, "I will smear this dirt all over your rug, and if this vacuum cleaner doesn't remove all of it, I will eat it". She agrees. And he proceeds to dump the bag of dirt, plugs in the vacuum, and says, "watch the magic happen". And the vacuum cleaner doesn't start. The lady laughs hysterically. "Our electricity has been out for three days. I'll go get you a spoon. Bon Appetite!"
The best vacuum cleaner I've ever bought was from a door to door vacuum seller. I wished I hadn't sold it because it did everything. Not only vacuumed the carpet, it acted like a blower it was also a carpet shampooer and there was an attachment to dry your hair lol.
This was a heated debate but it was nice to see that it was civil throughout - no personal attacks etc. Also for being wrong, the guy did a great job going up against DRam and articulating his argument.
I can't say what they do now. However, I can say that I had a relative that had a (paid up) whole-life policy for many decades, and that relative's estate received several times the face value of the policy when the relative died.
Whole life is not a "cash cow." Whole life pays the lowest commission rate of any fixed life insurance product. Term is the cash cow, paying as much as 140% of first year premium in commission.
Disclaimer: Whole Life policies mentioned on this segment are underwritten by Soprano Waste Management Services, c/o Bada-Bing Enterprises, LLC. All rights reserved.
You have to ask yourself, why does life insurance have a savings component and, for example, homeowners insurance, auto insurance, renters insurance, do not. Insurance agents prey on the young nieve buyer. I fell for this many years ago myself. Once I was educated on the math of it all, I cancelled my policy and got term. Best decision I ever made. Whole life is a legalized scam.
Just because Dave Ramsey is uninformed about how the IRS allows you to pull cash value from a policy tax free while your alive and then when your dead your family receives the death benefit in whole it is better than any term product. For 1 reason only. Statistically 3% of term policies pay out. The wealthy keep getting wealthier because of this unknown secret. The whole life policies pay a guaranteed divided each yr that does better than most mutual funds over a 20 yr period and you have no risk of the stock market which controls the mutual Funds. I just wish Dave would research why whole life products are better for the benefits. Also the insurance industry is more heavily regulated than any financial industry.
@@fountainofyouth2 LoL! Show us 1 whole life policy that beats the S&P. They return negatively, because part of the premium is eaten up by paying for the insurance. By the way, cash savings aren't taxed either. Whole life isn't, because it made no money, so nothing to tax.
@John Small That's good. The economy has to collapse so we can build a healthy economy based on saving and production. You can't build a phony economy for 80 years and expect to fix it with no pain, that's something only a politician would tell you.
With a $50,000 term policy... if you die, your family gets $50,000. That is simple enough. With a whole life policy, you get a $50,000 total payout if you die. What happens to the cash value??? You pay more for a whole life policy to build that "cash value", but why is is that it is not in ADDITION to the amount of your policy payout??? You don't get to keep both the cash value and the $50,000 payout. The insurance company keeps the cash. Ask your agent that question and see if they give you an honest answer. A whole life policy pays the agent a bigger commission too. That's why they love them so much.
When I was studying for the life insurance exam (20 years ago), I was convinced that whole life was the greatest fraud ever perpetrated on the American people. After I had 10 years in the business, I realized that there are some people that cannot understand anything more complicated than than a WL policy and that variable UL or a UL was not suitable or appropriate for them to address any permanent insurance needs. There are clients that have a permanent insurance need. They're usually wealthy and the policy can be designed to maintain an amount at risk (i.e.the "insurance" component) and keep the cost reasonable. For the average person, do what Dave said.
Showing a ray of light to an absolutely blind person!! He'll keep calling everything 'dark' and pitch black. Can't believe people listen to this guy who is only pushing his opinion on one thing without even willing to listen to the other person. Good luck Dave Ramsey's followers. :)
Dave isn't always right, but he gives advice to people who would destroy themselves financially, given half a chance. They're far better off listening to him than they ever would be left to their own devices.
@@jshepard152 People who follow Dave's advice are highly unlikely to go sideways. People who listen to this Agent are going to have a steep chance of losing money.
I have had both whole life and term insurance on me and my wife. At the age of 30, I got my wife a $200,000 twenty year level term policy because we had kids at the time and it was very cheap. She did not work outside the home. I also had a $25,000 whole life policy that I kept paying on also that I got her at age 26. Both policies were about the same cost in terms of premium. The sad fact of the matter is that my wife got cancer at age 38 and had 48 different chemo's and numerous radiation treatments and was "in and out of remission" until she passed away at age 51. I tried a few times to get more insurance on her and was unable to get any more after she got cancer, so after 20 years of paying into my term insurance, albeit a small amount each year the insurance expired at the end of the term and I did not collect anything. The $25,000 whole life policy grew to be $44,000 and I was able to collect on it when she passed away. My case may be rare but I guess I was thinking that's what life insurance is for... rare cases of early death. I am now 58 1/2 years old and have whole life on me and much more term. I won't be cancelling any of it. I don't think it's the best advice to tell a 20, 30, 40 year old person to get 20 year level term insurance because if people end up in our situation and become uninsurable after the term then they have no insurance. Just my opinion but I think there may be others that are or have been in our situation.
Agreed 100% and sorry for your loss. I remember reading a story of a woman who had a 20 yr term and was still alive after the 20 yrs but when she went to renew, obviously the premium skyrocketed and she couldn't afford it. So all that $$ over 20 yrs was gone. Nothing! No pay out, no cash value nothing! . I agree with the caller. It's situational. No 30 yr old should get a 20 yr term. That's throwing money away unless you can afford the increased premium after 20 yrs. And pray you don't outlive that renewal lol
The caller is a broker so he doesn't just sell just whole life there are different needs for different clients if you are 70 with no coverage you die your family will have to paid money they don't have Dave is not a licensed professional insurance broker he knew that guy knew what he was talking about the ignorance is mind blowing on this call
@@carultch Correct. Like death for example. Unless, under Dave's program everyone always dies "at the right time" with a term policy still in force...which rarely occurs.
Except he didn't actually explain any of his points. He just kept saying "your wrong and I'm right." What about a policy that blends term and whole life? Keep in mind one of Dave's sponsors is a company which only sells term...
This is Russ Grand, the agent in the video w/ Dave. His logic is seriously compromised, and it has NOTHING to do w/ whole life being a good or bad product, agent commissions or return on money. If anyone wants to take this subject to the next level, feel free to engage here and I will respond to all inquiries.
Yessir . With IUL, is it true that I can borrow the money and place it in other assets , while the 12% compound interest will still grow the money in the IUL as if I never never took out the money ?
@@Wxyzabc22 ...I was the guy on-air w/ Dave. You can use life insurance for anything you wish, but lawfully and ethically NOBODY can all it an investment. IT IS LIFE INSURANCE, pure and simple. There are some capabilities to use the value of such a policy, but to really compare it to how another investment medium performs you'd have to look at historical performance of both over time.
Banks buy whole life insurance. It’s called BOLI. Bank Owned Life Insurance. Rothchild and Vanderbilt both used Whole Life Insurance to pay for business deals when the Great Depression hit. The key is to getting a High Cash Value Life Insurance policy that is setup properly. Most whole life policies are not setup that way and that is where Dave gets stuck.
The credit card view I truly don’t agree with. In the digital age of commerce using a credit card adds security and creates a side benefit on points. As long as you use the credit card as if it was a debit card, in the sense you always pay off what you spend immediately or at least that cycle. Now most do NOT use the card this way and create debt. No debate on that use.
This caller is amazing, he’s telling the 100% truth and even missed some huge points that Cash Value could play on anyone’s life, anyone that could afford it that is. Ramsey’s listeners have no idea what’s going on just agreeing with their someone who’s good at talking. Whole Life has changed many lives around me & I will forever be grateful because of our Advisor. Thank you east coast caller!
I was a licensed insurance agent in FL for about two years (my license lapsed but I am about to get into it again). The insurance agent is correct that there is a way to get both the cash value and the face value at the same time. This can be done by adding a rider to the insurance policy. Of course, it isn't worth it. First, you have to pay more for the rider, second, as Dave points out, MATH shows that investing in growth stock mutual funds is vastly superior to the return of the cash value of a whole life policy. Mathematically, the best thing to do is to buy term and invest the difference. So, as someone who has been a life insurance agent, I am telling you that Dave is right about this. I've never sold a whole life policy, and people who I have spoken with about life insurance were appalled when I explained to them why whole life is not a good product. There are some niche situations where someone might make use of whole life, but in each of those circumstances, there are better alternatives. So, the agent that called into Dave's show is simply wrong. The math is on Dave's side. The advice he is giving on life insurance is dead on. The only disagreement I may have with Dave is that there are times I'd recommend 30 year term over 15 or 20 years (although 15 to 20 year term is sufficient for most people). P.S. I don't like annuities either.
what exactly can you earn in those funds? are they guaranteed? can you lose money? what will the taxes be that you will have to pay on those investment? when i have life insurance, i know the answers to those questions. i know exactly what i will earn. they are guaranteed, i can never lose any money and I will never have to pay any taxes on the cash taken from the policy.
I think I agree with the broker. I find it very hard to believe that Dave knows everything about life insurance. It's a huge topic, which I never had an interest in until I started studying it. Not everyone is qualified to sell insurance, though (even though they're licensed). If done properly, it does have its perks. It's always best to do your due diligence.
The broker has been groomed by his industry. He actually believes his own bs after doing it for so long. You can see this with a lot of professions. They can’t be subjective.
That's what happens when you get to control the narrative. Even when the caller is right and Dave's totally wrong (as was the case here), Dave's still right.
Whole life is actually worse than credit cards. I'd use a credit card if my kids needed food TODAY and I had no other options. I'd NEVER buy whole life.
The caller was getting hostile because Dave is harming people with misinformation and defaming ethical and competent financial practitioners, many of whom have forgotten more than Dave will ever know about personal finance.
@@xJayhawkFANx Whole life and other forms of permanent life products are appropriate for only a relatively few situations, but for tbose situations, they are absolutely essential. Saying otherwise is misinforming.
Life Insurance is income replacement insurance. There are many investment/savings options better than whole life. Term insurance is generally the best to protect others against loss of the income earner. Decreasing term.
Is very interested to hear an insurance agent on Dave Ramsey Show I wonder what other disagreement people would come on his show and argue about his statement
Agreed, I have had term insurance for all of my early working life. More money then went into reducing debt, and increasing wealth. At 60, I’m debt free and ‘self insured’.
Why do wealthy investors and huge companies buy whole life policies? Dave: "Because they're stupid" Really? It's not for the tax advantages and asset protection? Dave: "I'm right and you're wrong" 😄
I can't tell you how many people come to the table in their late 50's staring down the barrel of their term insurance about to expire completely panicked on how they are going to retire. Whole life is an inflation hedge truly ideal for ppl in their 20's and 30's
@@astroman30 Yes there is a loan component. Smart money is okay with that. Having dry powder is more important than a small interest fee. Borrowing at 5% to make 8%+ ROI is desirable.
@@NP-io4ol Looks like you've been snorting that "dry powder' with your stupid logic. If you like it, by all means, give me your money and I'll be happy to charge you interest as I let you BORROW AGAINST YOUR OWN MONEY. How stupid can you be?
Another few tidbits which Dave doesn't tell folks. Years ago, people would be able to purchase whole life insurance at a net after tax cost cheaper than term insurance, but unfortunately that segment of the law was repealed by the Tax Code of 1986 (IRS Sec 264C). What he now fails to tell people is that anyone who is self-employed can buy life insurance w/ before tax dollars through a qualified retirement plan. How convenient Dave omits these facts. He also forgets to tell callers that when life insurance w/ a cash value component is redeemed, if the profit exceeds the basis it is taxable as ORDINARY INCOME. Dave suggests that it is taxable at capital gains rates which is MATERIALLY INACCURATE (IRS Section 72). The tax rates between capital gains and ordinary income are different.
Instead of arguing the whole time, Dave should have told us how we could ensure that our policies are written the proper way. It may be the way very, very few are written, but it would’ve been helpful to know the lingo and what to look for. I personally don’t have whole life and I don’t plan on getting any, but for those who want it and think it’s better, whether it is or not, they would have benefited from learning how to have the policy written appropriately.
@Joseph R Absolutely correct. Most insurance agents are poorly qualified to perform proper life insurance analysis or apply advanced principles. All life insurance decisions should be made under the guidance of a qualified financial advisor.
Ok there is alot to unpack here between the two so let me get the basic stuff out of the way. Whole life policies are outdated and most companies have moved away from these policies since they are inefficient to say the least. The only people that actually want whole life policies are those who are older and have been told by their parents that whole life is the best. Not sure how that rumor got started but thats what I see very day. Yes insurance people get paid more for whole life rather than term du to what they are putting in allowing the company to take that premium and make more money for the company, and in return they pay the agent more. With that out of the way here is my 2 cents. Term is the only type of life insurance I would reccomend to anyone under the age of 50. Mainly due to the fact that it will save them money, allow them to convert to a preminent policy (NOT just whole life, but is an option if absolutley necissary), and have a life expectancy of later 70's. HOWEVER, anyone past the age of 50 is when a perminent policy may be a good fit, notice i said "maybe" and "perminent", not whole life. Whole life and perminent policies often get confused due to the name. Perminent policies now are typically invested in the S&P 500 to use as an investment vehivhle to grow the cash. That way it can eliminate the notion of an inneficient cash build up. However, if building cash is your main goal and the death benefit is just a cheryy on top then there is not reason to have a life insurance account, unless you are trying to protect from estate taxes or leave behind a legacy. Term policies typically only cover people at the latest until they are age 85, which looks pretty good. However, if you live past that age you are out of luck since most companies to not insure past that age and if they do you will pay an exorberate amount in premiums. Hence why I think that looking at a more perminent option past age 50 is a good option, but definetly not a requirment. The insurance agent came of a bit rude and I think He did not explain himself the best. Dave obviously knows what he is talking about. The one thing he dropped the ball on explaining is the death benefit for whole life. 99.9% of the time, Dave is correct in stating that the death benefit is only paid out and the cash goes back to the comany. The "right way to set it up" that the insurance dude was talking about is having the death benefit be a variable death benefit. This means you will get both, but most are not set up this way. And if they are, they aer typically not a whole life policy but rather a variable perminent policy. Every scenario for life insurance is differnt and I suggest talking to a planner who does not charge for their time to look over everything to see what is the best route to take.
Typical how "whole life" polices are always defended by someone who sells them I have never once heard a single independent financial adviser tell someone to buy a "Whole life" policy.
because the country wants you to contribute to your 401k, pension, and ira and get burned in the end. Whole life is a sound investment if you buy the correct one.
@@Vanquish39 How do you get burned? I have my money making money for me. Real money. I've spent some. Making more all the time, by saving and investing it.
Even though I disagree with Dave on some of his methods, I agree with him 100% on this. My mother passed away and she had both, term and full or whole. Term is the way to go. I will never ever forget that battle as long as I live. I despise the insurance brokers pushing this.
These are the question I put before my brooker but her answers were more confusing than before .. Do I need to ask anything else to get a better picture.. She is telling me I am missing the boat ! ------------- Dear Brooker 1- I am still skeptical about whole life insurance and not ready to change . I need to search and study it more myself . Here some of my questions for you so far ,presumably I accept paying premium of 2000 per mouth for one million. 1- what is the growth rate of my investment? ( I heard 1-2 % is that true ?!) 2a- what is the total commission paid to you as sell person ? 2b- and what is to total fee and miscellaneous that would be paid to the company and every one else on the way? 3- what is the amount of dead benefit? ( is that amount that my beneficiary get when I passed away ?) When it is available to be transfer to my beneficiary’s bank account ? 4- what Is the TRUE amount of cash value ? At the time ! Eg at 15 yrs or 20 yrs. Is the TOTAL cash value EXACTLY as the table you shown me comes directly and right away to my hand or my beneficiaries bank account ? Or it first goes back to the Canada life and Can Life deduct fees and commissions etc then a portion of the cash value become available to me ? If yes how much is that portion ? 5- why should I barrow my own money from Can life ? Does it means I am going to pay interest to borrow my own money ? 6-Finally I need to know if this 2000 per month ( 24000 per yr = 360,000 in 15 yrs paying to whole life is better investment than paying this amount towards my Mtg ). Can you compare these two for me ? Thank you
1 Corinthians 15:1-4 KJV Bible [1] Moreover, brethren, I declare unto you the gospel which I preached unto you, which also ye have received, and wherein ye stand; [2] By which also ye are saved, if ye keep in memory what I preached unto you, unless ye have believed in vain. [3] For I delivered unto you first of all that which I also received, how that Christ died for our sins according to the scriptures; [4] And that he was buried, and that he rose again the third day according to the scriptures: Ephesians 2:8-9 KJV Bible [8] For by grace are ye saved through faith; and that not of yourselves: it is the gift of God: [9] Not of works, lest any man should boast. Romans 10:9-13 KJV Bible [9] That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved. [10] For with the heart man believeth unto righteousness; and with the mouth confession is made unto salvation. [11] For the scripture saith, Whosoever believeth on him shall not be ashamed. [12] For there is no difference between the Jew and the Greek: for the same Lord over all is rich unto all that call upon him. [13] For whosoever shall call upon the name of the Lord shall be saved. John 3:16 KJV Bible For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life. John 14:6 KJV Bible Jesus saith unto him, I am the way, the truth, and the life: no man cometh unto the Father, but by me.
As someone who sells insurance, Whole Life Insurance is product designed to make Insurance agents money. WL should never be used as an investment tool.Term Life is the only policy needed.
I noticed how very carefully this caller ‘Russ’ refused to specifically answer Dave’s primary concern that when a person dies with whole life insurance, they only get paid the face value and not the additional cash value that was supposed to be built up and provided to the beneficiaries. This caller’s refusal to answer that specific concern has provided more evidence that whole life insurance is one of the biggest financial fraud scams perpetrated upon the American people and you have to be either dumb or evil to continue promoting it. And in addition, notice how this caller, Russ kept saying that the cash value ‘can be’ paid. Making it sound like it’s not normally paid out, but could be or can be paid out under some unique and extraneous circumstance, providing more evidence that whole life policies do not pay out the cash under normal, default circumstances. Thank you, Uncle Dave!
I used to work in Mortgage. He’s wrong about credit cards. If you have one that has a max limit of even 200 and only use it for gas and then pay it off each month, I have watched credit scores become eligible for a mortgage loan within a month or two for people who had no credit. And you think he’s responding on the fly but he’s actually being degrading and cutting the guy off. It really comes down to the person and making sure they do their part with credit, how they work their retirement, etc. Which is true with anything in life. There are no black and white answers. And yeah, I don't want my term to run out and be paying more later to renew it, when it could be compounding and eventually paying for itself. I also want to leave something to my family when I die and the biggest thing to think about are living benefits. Make sure your term and/or other life plans have living benefits so you can get the pay out while you're still alive if you end up with a terminal illness. To each their own but the dramatic word choice he uses isn't professional and if he’s not working in the field and just talks like he knows everything then be as much cautious of him as you are towards the things he bashes.
Use insurance for insurance and various other investment methods for investing. Never mix both of them, else the chances of you getting swindled is high.
I infiltrated the system to figure out the real deal. It really boils down to finding someone who is in the business for more than just money. Truthfully if the person has the right heart they can make sure they are licensed to do everything and then just do what's in clients best interest. But it may not all be as easy to understand as Term. It's when people Don't OFFER other products you have to be suspect. Fee only advisors talk bad about Commission and Annuities even had some talk bad about 401ks because they can't manage, but long term Fee Only with AUM is actually more than up front commission in many cases. Advisors talk bad about Whole Life cause they don't offer it or only sell Term, Debt relief programs, mutual funds or offer retirement accounts, or they have High Risk tolerance and hate anything with low risk and Whole life agents take bad about Variable products or Investments because they don't offer them. ALL products, I mean ALL have both Pros and Cons, it's truly working with a trust worthy person or getting a comprehensive analysis of your long term situation.
people need to understand whole life is term insurance that matures at age 100 and builds equity in the policy known as cash value which is the portion of the death benefit thats made available via loan not a separate savings which is what most people believe because its how its sold using the infinite banking concept and theirs also a huge difference between borrowing your own money and borrowing against your policy
What will you do if neither of you pass away by the time that policy expires? Does your insurer allow you to convert the policy into a permanent one? Term is a temporary solution to a permanent problem
@@blakealboyd It should never be a permanent problem. It’s to get your kids out of college. Your retirement nest egg should have enough security to negate the need for insurance by the time you are in your 50s.
The cash value of my whole life is added to the base value of the policy. My whole life was bought by my father when I was a child. It accrues at about 4.8%, my father paid what he knew was a high price for about 10 years. Then he lowered his payments. Today at age 57 the intrest pays for the insurance, but I put $15 per month in anyway. If it ever eats away at the increasing principal, I will cash out. Now he might have done better with government bonds, but it has not been a terrible product.
The fact that so many people trust Ramsey on this without understanding for themselves is sad. Ramsey is a salesman. Plain and simple. He’s also not a licensed financial advisor. He’s a guy who has filed bankruptcy twice and somehow managed to convince others that he’s an expert. 🤦🏻♂️
I’m an insurance agent, this guy was incorrect when he is saying if Whole Life is “written properly”, clients can receive both the death benefit and the cash account value in addition. I’ve never heard of a client receiving both. It’s either-or.
You are both wrong. Clients get "NET death benefit", as the death benefit grows as cash value grows. Unless you live very long, the net death benefit will almost always be more than the cash value amount. If you used up all of your cash value while alive, your beneficiary will get the difference between net death benefit and cash value.
All of the successful people I’ve known have owned whole life. May just be completely anecdotal, although they’ve all been Millionaire-Next-Door types.
I work in Life insurance and it’s true the cash value is ONLY a LIVING benefit. The company will pay the coverage amount and any dividend in the policy but NOT the Cash value
Having had my dad pass away with "whole life", I can assure you it does not pay out on top of the face value. Dave is 100% correct.
Thank you for your clarification based on experience and sorry that your dad passed.
Same experience. The "whole life" product was not much of a help to my mother.
Wait, wait, wait..... you mean they didn't write the policy up "correctly" so it would pay like the insurance guy here say they can?!? Say it ain't so...
Sorry to hear that, there are slimeballs in every industry, insurance is no exception.
The policy wasn’t written properly. My condolences.
what company?
I didn't understand half the words they said.
@Sona Falk ONLY BUY TERM LIFE INSURANCE. Anything else is a scam. That's all you need to know. Don't let the fancy jargon confuse you..... variable, whole life, fifth dividend, blah blah blah.
@TaKing Lives ONLY BUY TERM LIFE INSURANCE. Anything else is a scam. That's all you need to know. Don't let the fancy jargon confuse you..... variable, whole life, fifth dividend, blah blah blah.
Adam Slater? I just randomly saw this comment.. it's Nathan P.
You watch alot of Dave?
Adam Slater me neither😂😂😂😂
True 😂 didn't really understand the argument, but it was still very entertaining, and it seems like Dave won. Doubt they would air it if he lost.
I was an insurance agent for 10 years. Dave is right. When we sold Whole Life, it was a much bigger commission. Bottom line.
I was wondering why my man was talking with so much passion...what a bigger commission can do
@@chiyuni9252 Yep. This is his livelihood, so he'll defend the whole-life insurance policies to his death.
Dave Ramsey gives advice to poor and middle class people . That's his target market. Of course WL isn't a fit for those people... common sense.
Wealthy people don't listen to dave and suzy.. so it's important to be careful who you consume content from , depending who you are.
Also apparently Dave Ramsey owns Whole Life himself... :)
Another spin agents say to steer you away from sound advice. Estate tax is 12 mil and up that’s the rich everyone else is poor ? Give me a break
Whole life insurance are better for agents to sell because commissions,.. for 5 to 10 years premiums that people pay are for administration fees and not the policy itself, you can borrow against it but you have to pay interest in it
Agent: "..insurance broker for about 35 years.."
Dave: *SIGH*
🤣
I came looking for this comment. His face was CLASSIC!
😂😂😂
aka CROOK rippin people off for 35 years lookin out for HIS pocket NOT his client
Yessss!
Gawd David is so wrong. And you people don’t even realize it.
" you will still be a whole life agent and I will still be right." 🤣
Drop the mic
What a Savage mic drop right there!!!! Conversation over dude ...lol
LMBO!!!!!
Hahahaha mic drop!!!
I doubt he is right 100% of the time, no one is.
Dave should have asked him what his commission was on a 250,000 20 year term policy versus a 250,000 whole life policy.
That will explain why they sell whole life
I was an insurance salesperson for State Farm, briefly. The commission was not for fire or auto, only life. What a joke. Clearly a valueless product for the consumer if they are willing to share the money. Fire and auto, no commission, only hourly wage.
I've been an insurance broker for years and worked with 30+ companies and I've not heard of any company that will even offer 250k on a whole life policy. In fact, leads for people who want term insurance tend to be more expensive because insurance companies will pay higher commission for those products.
To some degree, they are both right. Whole life doesn't make a ton of sense for people who can get term. However, term is NOT 1/20th the price for somebody who is retirement age or older. Most term products are strict and most people of that age can't qualify for them anyway. Seniors normally pay less into their whole life policies than their beneficiaries will receive, regardless of the cash value. Many carriers have cash back options that cost slightly more but will return 100 percent of all premiums payed back to the owner of the policy, so the idea that they are scamming people by stealing their cash value is frankly ridiculous.
Why? That's an apples/oranges discussion.
@@johngerring2505 What??? 250k is not at all uncommon for a whole life policy.
@@rcdrury1 I’ve never seen it. Whole Life policies are typically for ages 50-85 and cap at $35,000. They are expensive because the life insurance company will almost certainly pay a death benefit at some point. Companies like Americo and Mutual of Omaha actually offer 10 percent more commission on average to sell their term product.
I think Dave can write the us budget in 2019 and get the country out of debt in 10 yrs
Charles Bronson I don’t like 10 years, theres no need to carry this much debt around that long. You can do better than that. I like a 8 year goal or a 6 year goal better. Take a weekend job to make ends meet if you have to.
Live off beans and rice, rice and beans
Probably. Too bad Dave can't get all the criminals out of our government!
Well if he got us out of debt that quickly you most likely wouldn’t receive social security or Medicare, the military funding would be cut, college students wouldn’t receive loans(probably a good thing), we’d have to raise taxes on large corporations resulting in unemployment. It would be a mess but once we’reout of debt everything will hopefully be given back. Dave would have a few tricks if he became president
I didn’t realize this but that’s what trumps trying to do with the government cuts and shutdowns. That’s his goal, it will simply
Take 15
Caller: whole life
Dave: sell the car
Patrick Star “rice and beans and pick up another job!”
😂
😭
😂😂😂😂
😅😅😅
I find it very interesting to hear Dave get challenged and respond on the fly. That's where you really realize he knows what he is talking about. He should do that more.
Sebastien 👍👍
Yeah Dave really handled it well when the agent brought up the fifth dividend option in Whole Life Insurance. I think Dave was at a loss of words for a moment. Dave really doesn't understand insurance. The agent had a point.
@@ericgilliland6140 HAHAHAHAHAAHAH
@@ericgilliland6140 Which is what? That only people who understand insurance should buy insurance? Dave knew (and I know he knew because I knew - and I am not as well-versed) that the insurance agent was digging into "sales speak," which is the language used to baffle the more intuitive potential buyers into purchasing something that they really do not need nor will they ever get.
It's ridiculous that the agent had to go down that road in order to try and baffle Dave into agreeing with him.
@@darthnocturnis3941 the point is that if Dave Ramsey doesn't really know or understand the product then shouldn't be offering a one size fits all solution about it. He blankly states that Whole Life Insurance is a rip off or a scam. The truth is that while Whole Life Insurance might not be for most people it can be used to benefit some people. There is no sales talk here. Whole Life Insurance serves its purpose in the market but it may not be for 90% of the population. If the average person doesn't invest the time to learn about these products then they should probably stay away and listen to Uncle Ramsey and buy term and invest the difference. For those who can take the time and learn the mechanics of a WLpolicy can take advantage of blended coverage with paid up additions and numerous dividend options. But I think we can all agree insurance agents are horrible.
"If the policy is written carefully......." Why so carefully?
Because it's a financial instrument designed with people's lives and livelihoods at stake.
Carefully considering the specific clients needs
It's possible. lol. It won't happen, but it's possible.
That just reeks full of 💩
"It's the payday lender of the middle class."
Sick burn!
I agree in many ways, but not the dividend driven product but the agents and the fact that all whole life is lumped together. There are many exceptions where whole life could be best for someone like when you deal with someone who just will not invest in the stock market no matter what and they got a mortgage late in life because they followed financial peace and focused on paying down all debt even though it may have been low interest and now they have a spouse who may get left behind without enough Social Security to keep up with the remaining mortgage. I've seen people take their entire 401k earning average 11% to pay off a mortgage that wasn't even 4% interest. They don't want their child to have to short sell house for cash if now they need long term care. People who know they have Alzheimer's in their family for example and they only have one child and don't want to be a burden to that only child. I've seen risk conservative people use instead of 529 even. I was shocked at how well it worked long term.
NaturalNikkiSmile a successful investment advisor does a thorough analysis of a client’s entire scenario- budget, debt, insurance, salary, age of children & short & long term goals. Unfortunately, I don’t see this very often as most take a piece meal approach & simply sell clients products without looking at the overall needs of the client. If a client is risk averse, it’s advisor’s job to educate the client on investments & their track record. Even a money market account would earn more than a whole life cash value.
@@naturalnikkismile1709
You would take out a mortgage to invest?
Good way to risk going broke.
Buy some more stocks on margin while you are at it.
Totally incorrect.
@@naturalnikkismile1709 What a bunch of BS you just spewed, Scammer.
Dave is spot on. My father had a whole life policy on my kids for 18yrs and when we tried to cash them out to help get my kids a car. It didn’t pay out anything close to its presumptive value.
We need more open debates like this.
If Daves ideas are sound which i think they are. Then hold them up to scrutiny and see if they prevail. Debate like this is healthy and educational. 👌
@James H - Come back and check out my replies made today. I think I gave several and can give even more unfortunately based on experience when it didn't hold up. For the most part you have to be moderate to high risk for good 20 or so years maxing our your retirement or at least an IRA. I found people waiting so long to start investing to pay down debt that was like 2.9 - 4%. Or they following the rules but still moderate or conservative investors and trying to time the market. I know he says you don't have to pay down mortgages with good interest before starting to invest or save but people do. Then they retire and huge part of their cash is now locked into the house (non liquid). And they haven't benefited from power of compound interest.
@@naturalnikkismile1709 "For the most part you have to be moderate to high risk for good 20 or so years maxing our your retirement or at least an IRA" I very strongly disagree with this statement. 20 years of maxing out an ira at a very conservative 6% = $220,000. If it's a ROTH, ALL that growth is tax free. Realizing 9+% is not unreasonable and certainly does not require high risk investing. Even sticking away a small amount early on makes a big difference down the road.
There is no debate. You throw more money away with whole life insurance. That’s all you need to know.
I agree that more open debates are needed, but this unfortunately was not one of them. It was one dogmatic, close minded person talking to another slightly less dogmatic, close minded person. In this case Dave was the most close minded. It is true that well set up whole life policies are rare. That’s because most brokers don’t set them up from the perspective of a financial strategist. If you want to learn more, there is a lot of info about it out there. We are working through FPU right now and I agree with Dave in many areas. His dogmatic stances are great for getting on the path to financial freedom and reprogramming a person’s brain to think about finances differently. Beyond that stage of life, there are other resources out there that can serve a person better IF their intent is to build a legacy of wealth for their family. Along with the amazing resources Dave provides, a person should bolster their financial intelligence with multiple resources and take ownership of their financial future.
Agreed. I'm impressed that Dave let's him talk.
Salesman worries about his own income , Dave trying to protect us from this predator .
Lets say someone had 100k in money they wanted to go to their children. Say that person puts 100k into a mutual fund and dies 2 years later. Their kids maybe get 110k. Lets say they bought a whole life policy. Family would get 200k. You tell me whats the better deal
@@skyewatson6204 If this was common place life insurance companies would not be in business . You must be a salesman , try honesty
@@positivesecret This is common place, if you buy a whole life policy.
But it also depends on other factors like how long you live and what type of insurance company you're buying from.
If you're buying an insurance policy for yourself you'll want to look for a mutual insurance company because as a policy holder you are also an owner of the company and you get to participate in earnings.
You probably think insurance companies make profits by charging premiums, they don't.
Insurance companies generate profits by wise investments in the stock market, keeping them solvent and able to create products that give back premiums and dividends when the insured dies.
@@positivesecret i mean it's a little off because you don't just drop $100k into a whole life policy because there are rules against creating a Modified Endowment Contract (basically so rich people can't place huge lump sums into insurance to get the tax advantages), but let's look at it a different way: If you put money into an Indexed Universal Life policy (the newest version of whole life) and had a death benefit of $200,000, that's the case from Day 1 after your initial premium and the policy is in force. Now yes, insurance companies would not be in business if everyone died in the first 2 years, that's why insurance companies have underwriters to make sure they're not insuring people close to death. But let's say that you have a client who got insured for $200k and 2 years later, after paying $2,400 in premiums, that client died, then the family would get $200k. But, if you have $2,400 in a 401(k), IRA or other investment, it's just worth $2,400. That's why people who are prudent get insurance. I hope that makes sense. And yes, I am a licensed agent.
No, you got it backwards
I love the confidence in this caller. And I'm glad DR let someone finish talking before he hung up on him.
"We'll pay you the cash value when the policy is written accordingly"
Well, there's a red flag right there.
LOL Yeah. That's like saying, 'When the law is applied correctly, there is justice served' - But how many criminals get away with terrible things every day
If you live to be 100
@@Dflonn Nope. A whole life policy can be structured to pay out face amount plus cas value upon death.
@@rcdrury1show me! If they can be written to do so, who writes them as such, and why isn't it always written as such?
@@Dflonn Any insurer can write them as such. I don't speak for others, but I wouldn't recommend it because I don't consider it an actuarially sound practice. Doing so would require additional premium to underwrite the higher death benefit. Think of it in the same vane as return of premium term. ROP term is typically thought of as a gimmick; a higher premium is paid than traditional term in order to underwrite the refunded premium. Actuarially, you're not money ahead by writing it this way.
I am an insurance broker myself. I started off in life insurance and within about 6 months I quit because of the things Dave is arguing. Once I saw it for myself and understood what this really was, I couldn’t do it anymore. Dave is 100% correct on everything he said
That's because you have morals and are a good person. Cheers to you, sir.
That’s why people should get index universal life because you get cash value plus death benefit
@@TheOpinionSports what is index whole insurance?
@@yohannesberaki6920 it’s called indexed universal life not index whole insurance. Whole life is not tied an index
Maybe because you failed out of the business. Not because you chose to leave the business.
I used to sell Life Insurance (Whole Life & Term, etc) and Dave is absolutely correct! This guy just called in to practice on his sale's pitch.
Who did you sell for? Because Dave was NOT correct, he was talking about a basic whole life policy sold by stock insurance companies. Stock companies sell the worse WL policies you can buy, your cash value accumulation is anemic. Mutual insurance companies work for the policy holders and the policy holder participates in dividends, so in addition to a Cash Value they accumulate dividends that they can choose to have distributed to them, or allow them to accumulate.
Dave doesn't know this, that's why he talked down to Russ.
Did you know, Dave owns WL policies? He said he keeps them because he's got to much invested in them riiiight.
Term with return of premium is a good product, but straight term only works for healthy people in certain age groups & situations. If you come across a person with mental retardation, congenital defects, or they have insulin dependent diabetes, they won't qualify for term. That's where whole life comes into play. Also, "used to" is the operative phrase.
@@str8Proud They are still ripoffs. I truly feel sorry for anyone who would buy something from that caller. Used car salesmen are perfect angels compared to people like him.
@@str8Proud Dave has said many times he doesn’t have Whole life policies. You are blatantly lying to try to fit your narrative.
@@str8Proud Exactly. Dave has no idea how to utilize WL and is NOT LICENSED to be saying this stuff. He's taking advantage of vulnerable and/ignorant people.
This guy just knows enough insurance words to sell stuff. Hahahah I sell life insurance and I agree with Dave.
When you are older you need a whole life policy. You can't even get term when you are older
@@ashleytaylor994 That's kind of the point though. The idea is that if you make it to retirement, your family shouldn't need an insurance payout when you die. And of course, it's not as if we can expect insurance companies to pay out $1M to everyone that dies of old age because that would be absurd and unworkable. I think people sort of vaguely have that idea that they can have that though, and that's how the scammers get their foot in the door.
@@smittycity42 I work with people on social security who have no life insurance in their 60s and 70s. All they can get is whole life
@@ashleytaylor994 I totally understand why that's all they can get, and I'd bet that they are being taken advantage of in general.
Brandon Rudder can u explain why u agree with Dave? U sell life insurance, what’s the difference? What’s beneficial? What should I and millions of other ppl be looking for in life Insurances? What are the “terms”, what are the do’s and donts...
This caller is mad because he’s cover had been blown!
niecybaby1960 RIGHT!
yeah and he is losing sales because the Truth is becoming known.
He got exposed
His*
There is virtually NO commission from selling a term policy. You get paid exactly once (when you sell the product) and get no re-occurring income. A whole life policy pays an insurance broker every single time a premium is paid. This man is angry because Dave Ramsey is telling people only to buy something (from him) that doesn't even give him gasoline money to meet with clients.
“I can argue with you like I can argue with a brick” that line had me laughing 😂
Ramsey is more of a brick in this instance though.
to be fair, the end products for both have their advantages.
Term is cheaper and with that savings you can do soooo much more
for me, i prefer WL since the price can be LOCKED IN.
i spent 3 years looking for life insurance. term is fine savings but at that rate, I'd rather die without any insurance. i need life insurance for my 50s and beyond, thats when term life, 30 year rate lock could be a viable option.
but for me, a man in his 30s, I prefer the rate lock of my youth so that when I'm in my 50s, 60s, and beyond i wont have to worry about the rate increases every 5 years or even after each renewal period.
theres so much mental gymnastics, with term. like it would almost be advantageous to get a 10 year policy THEN turn around to get 30 year term policy just so i could effectively get 40 ish years of the lowest rate/longest coverage.
since technically 40s is still a die-able decade. (any age, but again, for MY personal POV, the younger I die, the less I would care about legacy crap. I dont have a wife or kid, so why leave money on the table for my mom, neices, nephews, and brothers. thats what their own spouse and parents are for.)
my only prerogative as a young man is to ensure that I dont die in huge debts.
1) student loans die with me
2) auto loans could mean my folks would have to sell or pay off the remaining balance
3) credit card debt dies with me
4) if I had positive net worth then maybe my creditors would absorb it from my "estate"
so, no, i didn't care for a Life Insurance Policy.
mid 30s and onward, now I care since I have my debts in check.
so for me, WL is better.
to me, Term life is only good for folks who die before age 60 or have a rate lock for the full duration of their term, which is STILL ridiculous since a WL rate for anyone in their 30s or younger is way better than the term rates for folks in their 50s and older. (40s is a grey area)
A paid off home mortgage is taking the place of BMW as the new status symbol ❤️
Tar Jab good. A Chevy will go the same places as the BMW and coast less doing it. People can keep there fancy cars. Give me a plain Jane pickup truck.
Steven Johnson I know right. I get a lot of comments about driving in a 10 year old accord because I live in north Scottsdale, thing is, I own my Honda, they don't own their range rovers
Curious, why so? What is the point of paying off your house? It's the worst monetary investment someone can make. The only return on investment you get is 1. IF the the value goes up. And 2. IF it goes up in enough value, you have to sell your home to get any of that return. And the more equity you have in the home the MORE they can lend out. Banks can led $7 for every $1. So geuss what. When people try so hard to pay off early, then something comes up and they can't pay off their mortgage all that equity that's tied up, the bank can no longer lend on. So they forclose. I feel it's much better the pull out equity in your home and invest it in a better vehicle.
Frodo_Swaggins Dumbest thing I’ve read this month. Congrats!
BMWs are not that expensive depending which one you get. Smh. A fricking Honda goes as high as $40k and that's a civic.
You know you watch alot of Ramsey videos when you know a rerun from like 4 years ago. Still a good video.
Fo real ha
I read the title and immediately recognized the call. lol
I just found this today. Happy its posted.
The insurance dude is full of hot air! 😂
When my dad passed it was a nightmare trying to work with New York life. They do not pay the full value it’s such a scam
Just canceled my policy’s after 2 years of paying into them. My dumbass got sold a lie
I don't agree with everything Dave says but I am completely on board with him on this one.
Dave is right. My dad passed away several years ago and we received the face value and NOT anything on top of that. Whole life is a bad investment.
Did you think the cost to keep the policy in force was free??? If the policy up untill his death cost him 100k and you recieved 1mill, I'd say that was a wise investment. How much more greedy can you be? I bet you've blown away his death money ready because you're an idiot. If you were wise you'd buy more whole like for everyone in your family. Easiest way to create generational wealth.
@RileyCountyExtension even the insurance agent said that the policy holder has to set it up right to provide the additional gains, and it costs a bit more. If you choose to include whole life in your portfolio (a great way to protect money from being legally grabbed up by healthcare) you need to do your research first. Find out what "riders" are available, and compare companies at a third party site such as Nerd Wallet. You also want a _mutual_ insurance company. Most are publicly traded companies, out to make a profit for their shareholders. The few mutual companies treat their policy holders as share holders, and pay dividends accordingly. (And no, I'm not an agent.)
With some due diligence, you can get a decent product, and in the end, when healthcare costs are eating away your fortune, and term is no longer affordable, whole life insurance will be there to help your family. How well it does so depends on your level of diligence in finding the best options. Agents won't typically do this for you.
Ponderdeep for the lay person, most wont do the due diligence nor have an idea if it is set up right. Insurance should be simple “one dies family is paid”
That’s bc it was on a level benefit not increasing. Sorry to hear about your pops.
@@Scott-got-caught You are crazy!!! Terrible advice
One of the best calls Dave has ever taken. I enjoy watching this one every few years haha!
Who calls the Dave Ramsey Show to argue with him?!?! 😳
It’s his show!
My mind is blown 🤦🏽♀️🤦🏽♀️
Think it's good if there's open dialogue
The only reasons I can think of are: 1) He wanted to capitalize on Dave's large audience and 2) he thinks he knows more or is smarter than Dave and thought he could win the argument. There are a lot of whole life insurance salesmen who hate Dave Ramsey.
MakennaXO, it's great, and it needs to happen when the host doesn't know the details of what hes talking about, similar to Dave and permanent insurance products.
It's staged publicity for both, duh
MakennaXO not argue. debate
The caller was a door to door vacuum seller back in the day.
A door-to-door vacuum salesman shows up at a house. The woman living there answers the door. The salesman produces his vacuum cleaner to sell, and a bag of dirt. He tells the lady, "I will smear this dirt all over your rug, and if this vacuum cleaner doesn't remove all of it, I will eat it".
She agrees. And he proceeds to dump the bag of dirt, plugs in the vacuum, and says, "watch the magic happen". And the vacuum cleaner doesn't start. The lady laughs hysterically. "Our electricity has been out for three days. I'll go get you a spoon. Bon Appetite!"
The best vacuum cleaner I've ever bought was from a door to door vacuum seller. I wished I hadn't sold it because it did everything. Not only vacuumed the carpet, it acted like a blower it was also a carpet shampooer and there was an attachment to dry your hair lol.
This was a heated debate but it was nice to see that it was civil throughout - no personal attacks etc. Also for being wrong, the guy did a great job going up against DRam and articulating his argument.
Apart from when he insinuated that Russ was a brick 🤣
I can't say what they do now. However, I can say that I had a relative that had a (paid up) whole-life policy for many decades, and that relative's estate received several times the face value of the policy when the relative died.
Yes, they still do. A single-pay life policy will accumulate paid-up additions from declared dividends.
Dave is only presenting what serves him. If whole life were so terrible it wouldn’t exist
@@blakealboyd Terrible logic. A lot of terrible things exist that are a bad product.
Thank you Don and that is the the truth about Whole Life policies. I'm so sad it's getting a bad rap
@@rcdrury1 single life pay is okay yet it will be taxable event
He's angry because his little cash-cow is being exposed for what it is
Sir Raymond LuxuryYacht You sure are right!
Jokes on you Dave’s Scamming us all
Whole life is not a "cash cow." Whole life pays the lowest commission rate of any fixed life insurance product. Term is the cash cow, paying as much as 140% of first year premium in commission.
This is legendary
Hey, I really like your channel.
How are you everywhere lol
Horror history has entered the chat! Leggo
But did you stick around til the end of this video?
I didn't expect to see your channel here. Thank you for your hard work. Take care.
Disclaimer: Whole Life policies mentioned on this segment are underwritten by Soprano Waste Management Services, c/o Bada-Bing Enterprises, LLC. All rights reserved.
She was a hoo-ah!
“Whole life is the pay day lender to the middle class.” - Dave Ramsey
You have to ask yourself, why does life insurance have a savings component and, for example, homeowners insurance, auto insurance, renters insurance, do not. Insurance agents prey on the young nieve buyer. I fell for this many years ago myself. Once I was educated on the math of it all, I cancelled my policy and got term. Best decision I ever made. Whole life is a legalized scam.
Preach!!
That's how you end a phone call with a shady salesman right there.
The Coupon Collector super shady
Just because Dave Ramsey is uninformed about how the IRS allows you to pull cash value from a policy tax free while your alive and then when your dead your family receives the death benefit in whole it is better than any term product. For 1 reason only. Statistically 3% of term policies pay out. The wealthy keep getting wealthier because of this unknown secret. The whole life policies pay a guaranteed divided each yr that does better than most mutual funds over a 20 yr period and you have no risk of the stock market which controls the mutual Funds. I just wish Dave would research why whole life products are better for the benefits. Also the insurance industry is more heavily regulated than any financial industry.
@@fountainofyouth2 LoL!
Show us 1 whole life policy that beats the S&P.
They return negatively, because part of the premium is eaten up by paying for the insurance.
By the way, cash savings aren't taxed either. Whole life isn't, because it made no money, so nothing to tax.
Invest the difference
Lora Meyer thanks for your comment. It’s almost like Dave is trying to keep people from knowing about this. I’m so confused.
I vote Dave Ramsey for president. ..make America great again
I agree. I'd settle for forcing Congress to apply FPU principles to their spending of our money.
Heck yeah!!!!
Make America Debt-Free Again!
@John Small That's good. The economy has to collapse so we can build a healthy economy based on saving and production. You can't build a phony economy for 80 years and expect to fix it with no pain, that's something only a politician would tell you.
Congress will block him at every turn.
With a $50,000 term policy... if you die, your family gets $50,000. That is simple enough.
With a whole life policy, you get a $50,000 total payout if you die. What happens to the cash value??? You pay more for a whole life policy to build that "cash value", but why is is that it is not in ADDITION to the amount of your policy payout??? You don't get to keep both the cash value and the $50,000 payout.
The insurance company keeps the cash.
Ask your agent that question and see if they give you an honest answer. A whole life policy pays the agent a bigger commission too. That's why they love them so much.
They will lie and say it's "absorbed" the death benefit.
Rerun or not, I enjoyed listening.
Green Machine sound principles never die
When I was studying for the life insurance exam (20 years ago), I was convinced that whole life was the greatest fraud ever perpetrated on the American people. After I had 10 years in the business, I realized that there are some people that cannot understand anything more complicated than than a WL policy and that variable UL or a UL was not suitable or appropriate for them to address any permanent insurance needs. There are clients that have a permanent insurance need. They're usually wealthy and the policy can be designed to maintain an amount at risk (i.e.the "insurance" component) and keep the cost reasonable. For the average person, do what Dave said.
Buy-Sell Agreements will fall apart when term insurance expires, and when retaining key employees in the business, VUL is the way to go.
@@bennettblack2493 yea but a buy sell may not be needed anymore if you get a term to retirement age and sell/pass on the business
Quite frankly, if there's a product with THAT many "circumstances" to get your money... it's probably a bad product.
"I'm not aAAAHH-guing with you. I've written these fah thuhty faaaaave yeeee-ahhhhs"
East coaster... nuff said.
😂🤣😂 so accurate I can hear everyone in bah stan getting wicked mad at dah pissa
😂😂😂
😂😂😂😂😂😂😂😂
We're collecting excess libtards, fast on the tail of the left coast. 💩🤮
“I won’t get into the issue of performance” ok ha that’s all I needed to hear.
Showing a ray of light to an absolutely blind person!! He'll keep calling everything 'dark' and pitch black. Can't believe people listen to this guy who is only pushing his opinion on one thing without even willing to listen to the other person. Good luck Dave Ramsey's followers. :)
Dave isn't always right, but he gives advice to people who would destroy themselves financially, given half a chance. They're far better off listening to him than they ever would be left to their own devices.
@@jshepard152 People who follow Dave's advice are highly unlikely to go sideways. People who listen to this Agent are going to have a steep chance of losing money.
I have had both whole life and term insurance on me and my wife. At the age of 30, I got my wife a $200,000 twenty year level term policy because we had kids at the time and it was very cheap. She did not work outside the home. I also had a $25,000 whole life policy that I kept paying on also that I got her at age 26. Both policies were about the same cost in terms of premium. The sad fact of the matter is that my wife got cancer at age 38 and had 48 different chemo's and numerous radiation treatments and was "in and out of remission" until she passed away at age 51. I tried a few times to get more insurance on her and was unable to get any more after she got cancer, so after 20 years of paying into my term insurance, albeit a small amount each year the insurance expired at the end of the term and I did not collect anything. The $25,000 whole life policy grew to be $44,000 and I was able to collect on it when she passed away. My case may be rare but I guess I was thinking that's what life insurance is for... rare cases of early death. I am now 58 1/2 years old and have whole life on me and much more term. I won't be cancelling any of it. I don't think it's the best advice to tell a 20, 30, 40 year old person to get 20 year level term insurance because if people end up in our situation and become uninsurable after the term then they have no insurance. Just my opinion but I think there may be others that are or have been in our situation.
Agreed 100% and sorry for your loss. I remember reading a story of a woman who had a 20 yr term and was still alive after the 20 yrs but when she went to renew, obviously the premium skyrocketed and she couldn't afford it. So all that $$ over 20 yrs was gone. Nothing! No pay out, no cash value nothing! . I agree with the caller. It's situational. No 30 yr old should get a 20 yr term. That's throwing money away unless you can afford the increased premium after 20 yrs. And pray you don't outlive that renewal lol
“At the end of the day You’ll still be a whole life agent and I’ll still be right.” 😂
hes not right though.
Dave is 100% right on this
@@Vanquish39 haha, you must sell insurance. 😂
The caller is a broker so he doesn't just sell just whole life there are different needs for different clients if you are 70 with no coverage you die your family will have to paid money they don't have Dave is not a licensed professional insurance broker he knew that guy knew what he was talking about the ignorance is mind blowing on this call
He’s actually wrong. Participation Whole Life as an asset class works for one reason: Tax
The guy on the line sounds like a con artist.
Dude I was going to say that! Hahaha
Insurance is not supposed to be an investment. END OF DISCUSSION.
Yeah. Insurance is supposed to be for mitigation of risk when catastrophic events happen that cost you unexpected expenses.
@@carultch Correct. Like death for example. Unless, under Dave's program everyone always dies "at the right time" with a term policy still in force...which rarely occurs.
People think Dave Ramsey is such a hothead. This video is proof he has control and patience.
This guy tried to dictate the terms of Dave's program...not very smart.
Except he didn't actually explain any of his points. He just kept saying "your wrong and I'm right." What about a policy that blends term and whole life? Keep in mind one of Dave's sponsors is a company which only sells term...
This is Russ Grand, the agent in the video w/ Dave. His logic is seriously compromised, and it has NOTHING to do w/ whole life being a good or bad product, agent commissions or return on money. If anyone wants to take this subject to the next level, feel free to engage here and I will respond to all inquiries.
Yessir . With IUL, is it true that I can borrow the money and place it in other assets , while the 12% compound interest will still grow the money in the IUL as if I never never took out the money ?
My question is, is the IBC using dividend paying whole life legitimate?
@@Wxyzabc22 ...I was the guy on-air w/ Dave. You can use life insurance for anything you wish, but lawfully and ethically NOBODY can all it an investment. IT IS LIFE INSURANCE, pure and simple. There are some capabilities to use the value of such a policy, but to really compare it to how another investment medium performs you'd have to look at historical performance of both over time.
@@user-ch9uf5rn8u I understand, and will do that. Thank your for your response.
I LOVE how Dave is so coooooool- no presure--- no anger --- cool as a cucumber --- He has lived the Truth.....PRINCIPLES are always the SAME
Banks buy whole life insurance. It’s called BOLI. Bank Owned Life Insurance. Rothchild and Vanderbilt both used Whole Life Insurance to pay for business deals when the Great Depression hit. The key is to getting a High Cash Value Life Insurance policy that is setup properly. Most whole life policies are not setup that way and that is where Dave gets stuck.
Gotta love how Dave only tells half the truth. Truly doing a disservice to his followers
👍
The credit card view I truly don’t agree with. In the digital age of commerce using a credit card adds security and creates a side benefit on points. As long as you use the credit card as if it was a debit card, in the sense you always pay off what you spend immediately or at least that cycle.
Now most do NOT use the card this way and create debt. No debate on that use.
This is an oldie but a goodie. Old time listeners will know
@Wiliam Forsythe
What was the point of saying that? Dementia?
This caller is amazing, he’s telling the 100% truth and even missed some huge points that Cash Value could play on anyone’s life, anyone that could afford it that is. Ramsey’s listeners have no idea what’s going on just agreeing with their someone who’s good at talking. Whole Life has changed many lives around me & I will forever be grateful because of our Advisor. Thank you east coast caller!
I was a licensed insurance agent in FL for about two years (my license lapsed but I am about to get into it again). The insurance agent is correct that there is a way to get both the cash value and the face value at the same time. This can be done by adding a rider to the insurance policy. Of course, it isn't worth it. First, you have to pay more for the rider, second, as Dave points out, MATH shows that investing in growth stock mutual funds is vastly superior to the return of the cash value of a whole life policy.
Mathematically, the best thing to do is to buy term and invest the difference. So, as someone who has been a life insurance agent, I am telling you that Dave is right about this. I've never sold a whole life policy, and people who I have spoken with about life insurance were appalled when I explained to them why whole life is not a good product. There are some niche situations where someone might make use of whole life, but in each of those circumstances, there are better alternatives.
So, the agent that called into Dave's show is simply wrong. The math is on Dave's side. The advice he is giving on life insurance is dead on. The only disagreement I may have with Dave is that there are times I'd recommend 30 year term over 15 or 20 years (although 15 to 20 year term is sufficient for most people).
P.S. I don't like annuities either.
Bravo!! Thank you for your honesty.
what exactly can you earn in those funds? are they guaranteed? can you lose money? what will the taxes be that you will have to pay on those investment? when i have life insurance, i know the answers to those questions. i know exactly what i will earn. they are guaranteed, i can never lose any money and I will never have to pay any taxes on the cash taken from the policy.
i was wondering the same thing. I dont have an issue paying for WLI if i know im not gonna invest in anything else.
i@@-Frost--
THANK YOU! This show is saving my family. Many blessings and good vibes.
The fine print: "Guaranteed rate of return is dependent on the issuers ability to pay".
I think I agree with the broker. I find it very hard to believe that Dave knows everything about life insurance. It's a huge topic, which I never had an interest in until I started studying it. Not everyone is qualified to sell insurance, though (even though they're licensed). If done properly, it does have its perks. It's always best to do your due diligence.
The broker has been groomed by his industry. He actually believes his own bs after doing it for so long. You can see this with a lot of professions. They can’t be subjective.
dave 1 - salesman 0
juvaholics 😊👍👍
That's what happens when you get to control the narrative. Even when the caller is right and Dave's totally wrong (as was the case here), Dave's still right.
Dave has had these calls in the past and they never change Dave's mind
Whole life is actually worse than credit cards. I'd use a credit card if my kids needed food TODAY and I had no other options. I'd NEVER buy whole life.
Can we all take a moment to enjoy how calm and collected Dave stays despite his growing irritation and the increasing hostility from the caller?
Cianna Coleman 👍👍
The caller was getting hostile because Dave is harming people with misinformation and defaming ethical and competent financial practitioners, many of whom have forgotten more than Dave will ever know about personal finance.
@@rcdrury1 explain to me how he is spreading misinformation?
@@rcdrury1 hi
@@xJayhawkFANx Whole life and other forms of permanent life products are appropriate for only a relatively few situations, but for tbose situations, they are absolutely essential. Saying otherwise is misinforming.
“If the policy is written correctly”
: unfortunately your policy wasn’t written correctly.
"If"was key and majority do not have a good policy when they have cash value
Offer may be revoked at any time. Offer is hereby revoked.
guy almost convinced me his bull shit. He's a solid greasy slick as snot salesman.
No; he's a well qualified financial advisor who understands life insurance on a level far beyond most agents.
Life Insurance is income replacement insurance. There are many investment/savings options better than whole life. Term insurance is generally the best to protect others against loss of the income earner. Decreasing term.
Is very interested to hear an insurance agent on Dave Ramsey Show I wonder what other disagreement people would come on his show and argue about his statement
Agreed, I have had term insurance for all of my early working life. More money then went into reducing debt, and increasing wealth. At 60, I’m debt free and ‘self insured’.
Why do wealthy investors and huge companies buy whole life policies?
Dave: "Because they're stupid"
Really? It's not for the tax advantages and asset protection?
Dave: "I'm right and you're wrong" 😄
The tax advantage is negligible compared to the amount paid on the policy
Erin Sandwell yeppppp
@@ERIN_198 Then why do the companies do it?
@@DUANEYAISER cause they're ignorant. They think the tax advantage exists
@@ERIN_198 Structured correctly, the tax advantages can be phenomenal.
I can't tell you how many people come to the table in their late 50's staring down the barrel of their term insurance about to expire completely panicked on how they are going to retire. Whole life is an inflation hedge truly ideal for ppl in their 20's and 30's
So, how does one get money out of this "inflation hedge" without having to BORROW AGAINST YOUR OWN MONEY?
@@astroman30 Yes there is a loan component. Smart money is okay with that. Having dry powder is more important than a small interest fee. Borrowing at 5% to make 8%+ ROI is desirable.
@@NP-io4ol Looks like you've been snorting that "dry powder' with your stupid logic. If you like it, by all means, give me your money and I'll be happy to charge you interest as I let you BORROW AGAINST YOUR OWN MONEY. How stupid can you be?
"I'd like to either clarify with you, or maybe get some clarity" 😂😂
That’s funny 😂
Another few tidbits which Dave doesn't tell folks. Years ago, people would be able to purchase whole life insurance at a net after tax cost cheaper than term insurance, but unfortunately that segment of the law was repealed by the Tax Code of 1986 (IRS Sec 264C). What he now fails to tell people is that anyone who is self-employed can buy life insurance w/ before tax dollars through a qualified retirement plan. How convenient Dave omits these facts.
He also forgets to tell callers that when life insurance w/ a cash value component is redeemed, if the profit exceeds the basis it is taxable as ORDINARY INCOME. Dave suggests that it is taxable at capital gains rates which is MATERIALLY INACCURATE (IRS Section 72). The tax rates between capital gains and ordinary income are different.
LESSON: NEVER EVER TRY TO SELL A ROLLS-ROYCE TO A BICYCLE CUSTOMER.
Instead of arguing the whole time, Dave should have told us how we could ensure that our policies are written the proper way. It may be the way very, very few are written, but it would’ve been helpful to know the lingo and what to look for. I personally don’t have whole life and I don’t plan on getting any, but for those who want it and think it’s better, whether it is or not, they would have benefited from learning how to have the policy written appropriately.
He lost me when he said you should never use a Credit card. I've flown to Hawaii for $68 because of credit cards.
We're all so happy for you, too.
“If a policy is arranged properly ...” ”when does that happen?” “🤔”
When writing for family or friends.
If a used car salesman is ethical.....
Every time it is done by a qualified professional.
@Joseph R Absolutely correct. Most insurance agents are poorly qualified to perform proper life insurance analysis or apply advanced principles. All life insurance decisions should be made under the guidance of a qualified financial advisor.
@@rcdrury1 and by financial advisor I would add that it can't be the same person selling you insurance. It should be a fee only advisor.
Ok there is alot to unpack here between the two so let me get the basic stuff out of the way. Whole life policies are outdated and most companies have moved away from these policies since they are inefficient to say the least. The only people that actually want whole life policies are those who are older and have been told by their parents that whole life is the best. Not sure how that rumor got started but thats what I see very day. Yes insurance people get paid more for whole life rather than term du to what they are putting in allowing the company to take that premium and make more money for the company, and in return they pay the agent more.
With that out of the way here is my 2 cents. Term is the only type of life insurance I would reccomend to anyone under the age of 50. Mainly due to the fact that it will save them money, allow them to convert to a preminent policy (NOT just whole life, but is an option if absolutley necissary), and have a life expectancy of later 70's. HOWEVER, anyone past the age of 50 is when a perminent policy may be a good fit, notice i said "maybe" and "perminent", not whole life. Whole life and perminent policies often get confused due to the name. Perminent policies now are typically invested in the S&P 500 to use as an investment vehivhle to grow the cash. That way it can eliminate the notion of an inneficient cash build up. However, if building cash is your main goal and the death benefit is just a cheryy on top then there is not reason to have a life insurance account, unless you are trying to protect from estate taxes or leave behind a legacy.
Term policies typically only cover people at the latest until they are age 85, which looks pretty good. However, if you live past that age you are out of luck since most companies to not insure past that age and if they do you will pay an exorberate amount in premiums. Hence why I think that looking at a more perminent option past age 50 is a good option, but definetly not a requirment.
The insurance agent came of a bit rude and I think He did not explain himself the best. Dave obviously knows what he is talking about. The one thing he dropped the ball on explaining is the death benefit for whole life. 99.9% of the time, Dave is correct in stating that the death benefit is only paid out and the cash goes back to the comany. The "right way to set it up" that the insurance dude was talking about is having the death benefit be a variable death benefit. This means you will get both, but most are not set up this way. And if they are, they aer typically not a whole life policy but rather a variable perminent policy.
Every scenario for life insurance is differnt and I suggest talking to a planner who does not charge for their time to look over everything to see what is the best route to take.
He's telling the CEO of a multimillion dollar company that CEOs would know more than average person 😅
Typical how "whole life" polices are always defended by someone who sells them I have never once heard a single independent financial adviser tell someone to buy a "Whole life" policy.
because the country wants you to contribute to your 401k, pension, and ira and get burned in the end. Whole life is a sound investment if you buy the correct one.
Mr. Taxpayer here.......Can you get out your checkbook because I want to sell you some land on the moon.
Because they only make sense for a limited population. There's only a few types of situations where whole life is potentially a good idea.
@@channell11 Potentially.
Still qualifying the product... even for "certain" situations.
@@Vanquish39 How do you get burned? I have my money making money for me.
Real money. I've spent some. Making more all the time, by saving and investing it.
Even though I disagree with Dave on some of his methods, I agree with him 100% on this. My mother passed away and she had both, term and full or whole. Term is the way to go. I will never ever forget that battle as long as I live. I despise the insurance brokers pushing this.
sorry to hear that...
These are the question I put before my brooker but her answers were more confusing than before ..
Do I need to ask anything else to get a better picture..
She is telling me I am missing the boat !
-------------
Dear Brooker
1- I am still skeptical about whole life insurance and not ready to change .
I need to search and study it more myself .
Here some of my questions for you so far ,presumably I accept paying premium of 2000 per mouth for one million.
1- what is the growth rate of my investment? ( I heard 1-2 % is that true ?!)
2a- what is the total commission paid to you as sell person ?
2b- and what is to total fee and miscellaneous that would be paid to the company and every one else on the way?
3- what is the amount of dead benefit? ( is that amount that my beneficiary get when I passed away ?)
When it is available to be transfer to my beneficiary’s bank account ?
4- what Is the TRUE amount of cash value ? At the time ! Eg at 15 yrs or 20 yrs.
Is the TOTAL cash value EXACTLY as the table you shown me comes directly and right away to my hand or my beneficiaries bank account ?
Or it first goes back to the Canada life and Can Life deduct fees and commissions etc then a portion of the cash value become available to me ? If yes how much is that portion ?
5- why should I barrow my own money from Can life ?
Does it means I am going to pay interest to borrow my own money ?
6-Finally I need to know if this 2000 per month ( 24000 per yr = 360,000 in 15 yrs paying to whole life is better investment than paying this amount towards my Mtg ).
Can you compare these two for me ?
Thank you
excellent questions
Can this be a new segment? Debate Dave? Funny and cool to see both sides.
Thanks for reposting this 👌New listeners will appreciate it for sure. Thanks Dave
1 Corinthians 15:1-4
KJV Bible
[1] Moreover, brethren, I declare unto you the gospel which I preached unto you, which also ye have received, and wherein ye stand;
[2] By which also ye are saved, if ye keep in memory what I preached unto you, unless ye have believed in vain.
[3] For I delivered unto you first of all that which I also received, how that Christ died for our sins according to the scriptures;
[4] And that he was buried, and that he rose again the third day according to the scriptures:
Ephesians 2:8-9
KJV Bible
[8] For by grace are ye saved through faith; and that not of yourselves: it is the gift of God:
[9] Not of works, lest any man should boast.
Romans 10:9-13
KJV Bible
[9] That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved.
[10] For with the heart man believeth unto righteousness; and with the mouth confession is made unto salvation.
[11] For the scripture saith, Whosoever believeth on him shall not be ashamed.
[12] For there is no difference between the Jew and the Greek: for the same Lord over all is rich unto all that call upon him.
[13] For whosoever shall call upon the name of the Lord shall be saved.
John 3:16
KJV Bible
For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.
John 14:6
KJV Bible
Jesus saith unto him, I am the way, the truth, and the life: no man cometh unto the Father, but by me.
As someone who sells insurance, Whole Life Insurance is product designed to make Insurance agents money. WL should never be used as an investment tool.Term Life is the only policy needed.
Thank you for your honesty, Sir. You're a good man.
I forgot about this video. Two very strongly opinionated dudes going at it. Love it!
I noticed how very carefully this caller ‘Russ’ refused to specifically answer Dave’s primary concern that when a person dies with whole life insurance, they only get paid the face value and not the additional cash value that was supposed to be built up and provided to the beneficiaries. This caller’s refusal to answer that specific concern has provided more evidence that whole life insurance is one of the biggest financial fraud scams perpetrated upon the American people and you have to be either dumb or evil to continue promoting it.
And in addition, notice how this caller, Russ kept saying that the cash value ‘can be’ paid. Making it sound like it’s not normally paid out, but could be or can be paid out under some unique and extraneous circumstance, providing more evidence that whole life policies do not pay out the cash under normal, default circumstances.
Thank you, Uncle Dave!
Well stated. Thank you.
Yep, when something "can" happen, you're dealing with shady business.
I used to work in Mortgage. He’s wrong about credit cards. If you have one that has a max limit of even 200 and only use it for gas and then pay it off each month, I have watched credit scores become eligible for a mortgage loan within a month or two for people who had no credit. And you think he’s responding on the fly but he’s actually being degrading and cutting the guy off. It really comes down to the person and making sure they do their part with credit, how they work their retirement, etc. Which is true with anything in life. There are no black and white answers. And yeah, I don't want my term to run out and be paying more later to renew it, when it could be compounding and eventually paying for itself. I also want to leave something to my family when I die and the biggest thing to think about are living benefits. Make sure your term and/or other life plans have living benefits so you can get the pay out while you're still alive if you end up with a terminal illness. To each their own but the dramatic word choice he uses isn't professional and if he’s not working in the field and just talks like he knows everything then be as much cautious of him as you are towards the things he bashes.
Basically this guy is pissed because his customers have heard Dave and are asking questions and he's losing commission 😂
Use insurance for insurance and various other investment methods for investing. Never mix both of them, else the chances of you getting swindled is high.
By that measure, never buy investments from the company that sold you a term policy.
How about all of these cute State Farm ads trying to get you (us) to mix banking and insurance?
I infiltrated the system to figure out the real deal. It really boils down to finding someone who is in the business for more than just money. Truthfully if the person has the right heart they can make sure they are licensed to do everything and then just do what's in clients best interest. But it may not all be as easy to understand as Term. It's when people Don't OFFER other products you have to be suspect. Fee only advisors talk bad about Commission and Annuities even had some talk bad about 401ks because they can't manage, but long term Fee Only with AUM is actually more than up front commission in many cases. Advisors talk bad about Whole Life cause they don't offer it or only sell Term, Debt relief programs, mutual funds or offer retirement accounts, or they have High Risk tolerance and hate anything with low risk and Whole life agents take bad about Variable products or Investments because they don't offer them. ALL products, I mean ALL have both Pros and Cons, it's truly working with a trust worthy person or getting a comprehensive analysis of your long term situation.
people need to understand whole life is term insurance that matures at age 100 and builds equity in the policy known as cash value which is the portion of the death benefit thats made available via loan not a separate savings which is what most people believe because its how its sold using the infinite banking concept and theirs also a huge difference between borrowing your own money and borrowing against your policy
👍
I have a new argument template:
“You can think that (insert point)
And I’ll still be right”
Thank you for having this conversation. I have term policies for myself and my son.
My children were kind of young when I got my term policy. I just added a child term rider; who is dependent on my kids for income? 🤷🏾♀️
What will you do if neither of you pass away by the time that policy expires? Does your insurer allow you to convert the policy into a permanent one? Term is a temporary solution to a permanent problem
@@blakealboyd It should never be a permanent problem. It’s to get your kids out of college. Your retirement nest egg should have enough security to negate the need for insurance by the time you are in your 50s.
The cash value of my whole life is added to the base value of the policy. My whole life was bought by my father when I was a child. It accrues at about 4.8%, my father paid what he knew was a high price for about 10 years. Then he lowered his payments. Today at age 57 the intrest pays for the insurance, but I put $15 per month in anyway. If it ever eats away at the increasing principal, I will cash out. Now he might have done better with government bonds, but it has not been a terrible product.
The fact that so many people trust Ramsey on this without understanding for themselves is sad. Ramsey is a salesman. Plain and simple. He’s also not a licensed financial advisor. He’s a guy who has filed bankruptcy twice and somehow managed to convince others that he’s an expert. 🤦🏻♂️
Tell us where he is wrong.
Ramsey is right on this one! I disagree with him on a lot of things, however he is 💯 % on target on this one!
A whole life contract can pay the death benefit and the cash value when designed with Option C.
"Option C" how much does that rider cost?
@@astroman30 Each insurance company would rate this differently.
I’m an insurance agent, this guy was incorrect when he is saying if Whole Life is “written properly”, clients can receive both the death benefit and the cash account value in addition. I’ve never heard of a client receiving both. It’s either-or.
You are both wrong. Clients get "NET death benefit", as the death benefit grows as cash value grows. Unless you live very long, the net death benefit will almost always be more than the cash value amount. If you used up all of your cash value while alive, your beneficiary will get the difference between net death benefit and cash value.
I was the dude on air here. Dave is giving you a con job...
The whole life agent NEVER refutes the cost of the product, he always deflects to his next talking point.
Yep, it’s a common and slimy behavioral characteristic, makes ‘used car sale man’ look like a teddy bear
Agent: Tons of people buy Whole Life Insurance
Dave: Yeah because they’re idiots and you should feel bad
😂
All of the successful people I’ve known have owned whole life. May just be completely anecdotal, although they’ve all been Millionaire-Next-Door types.
@@BM-ru7ef it’s because it’s a product for the wealthy not ideal for the poor
I work in Life insurance and it’s true the cash value is ONLY a LIVING benefit. The company will pay the coverage amount and any dividend in the policy but NOT the Cash value