This didn't me the difference between term or cash value, but rather just said "term life is the way to go because whole life doesn't have value to the consumer" but no reasons to back that statement up. I was not educated by this video.

Jason Barrett March 17 2010 1:12 PM

My mother is 68yrs old. She has a term life ins policy of $50.000 till age 70. My sister and I are owners of the policy. My mother is not finacially secure. No long term care, etc. Should my sister and I consider turning mom's term life policy into a variable universal life policy? Policy would be till age 90 and worth $50,000. Pymts would be aprox $120.00 monthy split between the two of us.

Kim March 16 2010 1:36 PM

Do I really need life insurance and if so what should I be willing to pay for monthly premiums?

Joe March 09 2010 12:38 PM

What about estate taxes? I just came from a meeting with an attorney and he recommends universal insurance to make sure someone else is paying my death tax.

Jeffery March 02 2010 1:45 PM

We bought into a whole life policy about seven months ago and want out of it. What are the consequences of "firing" our insurance man today?

Kim February 25 2010 8:20 AM

My wife and I both have whole life policies. We have been paying into them for approximately 3 years. at this point should I cancel them and focus that money elsewhere?

Brian February 23 2010 7:49 PM

I stopped paying the premiums on my whole life policy after about 9 years. Since that time the cash value has doubled even though the premiums are being deducted from it, AND, the death benefit continues to grow, it's now twice what it started out being 18 years ago. Between 2008 to 2009 the cash value increased by 5.5%, way better than my bank savings, and way-way better than my big losses in stock market investments. Cash values may not match the stock market in boom periods, but cash values never go down, they just keep chugging along with steady returns and very little risk. I'd say don't get into one of these policies if you're going to chicken-out after 4 or 5 years. It should be a long term commitment or not at all.

Doug February 19 2010 10:57 PM

My husband and I were fortunate, we paid into whole life policies for years but we actually are making money by surrendering them. We will make about $7000 from them. My question is do we want to have the federal income tax withheld? I know we have to pay taxes on it at some point, I guess I just don't understand which way to do it or how that works?

Deb February 01 2010 9:51 PM

I think there are some good ideas here but I get confused when I listen to Dave on the radio. I'm certain that I have heard him say that he himself has more than 10X his income in life insurance because "SWI", Sharon Wants It. I get nervous when I hear this b/c if he stills wants/needs it after his success. What level of success will I need in order to not need or want it? I'm 38 with 2 young children and I am concerned what I might want when I am 58. I know I want more for my family now then 10 years ago. If that trend continues then my current plan might not be enough down the road and my genetics my cause health concerns in the next 20 years. Suggestions?

David January 25 2010 4:39 PM

I am 70 and haveterm life and it is about to expire what should i do can i get this money back or will i lost it

doris g January 17 2010 3:47 PM

I am so confused now. My husband has universal insurance since 1994,and we pay $50/month on $200,000. Should we cash out now for @$3000 and switch to term insurance? He is close to 50 now, and I am wondering switching at this age is not worth it. If I only knew then, I would have gone for term, but....Any opinion?

mika January 07 2010 11:43 PM

My husband and I bought 2 whole life policies shortly after we bought our first house. We thought we were doing something good for our future. They company told us that the policies would be paid off after 13 years. Well, here we are 15 years later and still paying $185 per month (combined) and still not paid off? Now they are saying "due to market conditions, blah, blah, blah" market conditions never came up when we first bought in, convenient? Well, now I'm wondering what we will have to pay if we cancel and take the cash to pay off our debt. What we have in cash value on both policies would wipe out our credit cards plus a good chunk of our equity line. How much of the the cash value do you get if you cash out?

Beverly January 04 2010 1:56 PM

Penny T.....I am also in the same place as you only the nightmare has already begin..my husband has a 20 year term for $100,000.00 and at age 84 the rate have become unmanagable. We have decided to drop to $50,000.00 still making the payment around $500.00 per month...There is 25 years difference in our ages and althought I still work this insurance was going to be my only insurance for the future...I fell that any decision I made is the wrong one...so much for peace of mind.

Vic January 03 2010 7:37 PM

To Ryan: Return of Premium Term...You would have to earn a guaranteed 6% net, after-taxes return on that extra $13/month for 20 years to have $6000. Where can u guarantee that

Richard January 01 2010 1:58 PM

Great discussions! Kids life...I agree with Dylnn...not about replacing income, but dealing with expenses. As far as term insurance...it is temporary insurance. There is new term insurance out called Return Of Premium Term...you get 100% of your premiums back at the end of your term if you are still breathing...I've just purchased some on my wife and I. I'd suggest to younger people to purchase a small whole life policy...maybe $25K death benefit and then buy term to cover the majority of the need. That way, when the term expires, they still have something there to pay burial expenses. And, the dividends in that whole life policy are yours and can help increase the death benefit if set up correctly.

Steve January 01 2010 12:21 PM

Life insurance on Children is not about replacing a childs income, it is about burying them (having a service) and then replacing the income of a parent that wants to take time off to mourn the loss of a child. Trust me I know! Now yes I do understand the concept..if your debt free and have the savings then no big deal..you pay for the services and quit your job and live off of savings...but for those who are not debt free...medical bills can come in fast, funeral expenses add up (12K+) and parents are ready to return to work full-time or at all.

Dlynn December 30 2009 4:04 PM

My husband has term life that will begin to increase in premium by a significant amount when he reaches 65 (he is 62 now). He was forced into retirement at age 60 and we were not prepared for it at all. He has 2 pensions and Social Security. I have no pension as I have been a housewife with part-time, supportive jobs all my life. I will not receive his largest pension should he die before me. So now that term life policy has become important. However, we will not be able to afford the premium once it begins to increase. What should we do about life insurance now? Should we let the term policy expire and not continue to pay premiums or get new insurance?

Penny T December 29 2009 3:08 PM

To Jessica, if you took that $13 extra a month and invested it for 20 yrs, it would be worth more than $6240 probably a whole lot more.

Ryan December 27 2009 4:58 PM

Re: Kara's kid's policies, why does anyone need life insurance on kids? Life insurance is supposed to replace the "income" of the insured if they die so that those depending on that income can keep living. So unless they are wealthy child actors or have really high paying paper routes and mom and dad can't live without the kids' salary, they don't need to be insured. She doesn't mention how much the kids' policies cost but if she would have began investing only $20 per month for them at birth at Dave's example mutual fund rate of 12%, by the time they were about 28 yrs. old, ready to get married and have someone depending on their income, they would have over 50k saved anyway. Then, even not adding any more $$, that would double to over 100k in another 6 years! I know the agents try to tell you they might not be able to get insurance if they get sick but what are the real odds of that? If they did get sick, how far would 50k insurance payout go for their dependents anyway? Would the be able to add more coverage if they were sick? It is a high price to pay to "guarantee" insurability for a kid!

Terry December 27 2009 9:56 AM

Another good option is return of premium term life...like a term policy, the premium is guaranteed for 20 years, but at the end of the policy term, you get all of your premiums back. This amount is non-taxable, since you have already paid taxes on it. The premium is about double a regular term policy, but the advantages are great. For example, I can purchase a 20 year term life policy with a death benefit of $100,000.00 for $13.00/month. At the end of 20 years, I will have paid $3120.00, but will never see that money again. If I instead purchase a 20 year term return of premium policy with the same death benifit of $100,000.00, I will pay about $26.00/month. At the end of the 20 years, I will get back $6240.00, all of the money that I have put into the policy. To me, this is a far better investment than a standard term policy, and certainly better than whole life.

Jessica December 16 2009 2:15 PM

T is completely right. In response to those who ask what happens after 10,15, or 30 years when your term runs out....Dave Ramsey explains that in his Financial Peace University lessons. If you have been doing the techniques he teaches by the time your term ends you will have enough saved/invested that you will no longer need to be insured.

Ted November 25 2009 6:17 AM

The key to this is having the discipline to save and/or invest the price difference between a whole life policy and a term policy. If someone doesn't have the discipline to do that, they probably should not switch. For someone switching from whole life to term insurance, a good plan would be to *immediately* set up an automatic monthly bank transfer, in the amount of the premium difference, to a savings account or an investment account. That way, they'll never have a chance to get used to spending that money on normal living expenses. Someone still in the process of getting out of debt could start by having the transfer made to savings, and then every so often pull those savings to pay down debt; after all the debt is paid off, the premium difference transfers could go toward the fully-funded emergency fund; after the FFEF is in place, the premium difference could be transferred directly into an investment account. One of the great benefits of term insurance is that you can purchase much MORE coverage for much LESS money. So if someone dies while the term insurance is in effect and they still have a young family, the family will be in far better financial shape than they would have been with a smaller amount of whole life. On the other hand, if the insured person lives to a ripe old age, and saves and invests all through those years, the spouse should be OK in the end, too.

TLW November 24 2009 7:33 PM

My husband and I have term and our kids have whole. After learning about insurance in FPU we set up a meeting w/our agent. I will first say that he has always been more of the "teacher" type and not just a salesman. We told him that we'd like to put our kids on a rider and cancel theirs. He said that the company we're with(Northwestern Mutual Life) doesn't have them and he doesn't believe in them. e.g. What if the kids develop asthma or diabetes and they won't be covered under a new policy when they want one. Their insurance doesn't just insure anyone. You have to complete blood work(my friend couldn't get insured because he was diagnosed w/diabetes at 32). And w/whole life Dave Ramsey is right w/95% of companies but, not theirs. He went on to explain that you do get that money and can get it tax free if you "do it right". I guess my question is..what do we do w/our kids' insurance? They are 9&11 and have $50,000 policies

Kara November 24 2009 6:38 PM

Dave - What money? You're policy premiums? You don't get those back. You don't get them back with whole life, either. The money you do get back with whole life is your investment/savings portion, minus RIDICULOUS surrender charges. In fact, with your whole life policy, the money you are "investing" (I use the term looooooosely) is not even yours upon death. So you save for 20 years with this whole life, die, and your survivor only gets the face value of the policy. Not any of the cash value. WORST INVESTMENT IN THE WORLD. The "living benefits" sold with whole life are that you will have cash available to use if you needed it. You have to pay the life insurance company 6-8% interest UP FRONT in order to use YOUR MONEY, and then if you don't pay it back they reduce your life insurance coverage by that amount. Why would you not just save the money, put it in a jar, and bury it in the back yard???? Why would you give someone YOUR money and then be charged interest in order to use it? Why would you combine your savings with your life insurance and forfeit all that savings upon death? And of course the argument with whole life insurance supporters is that you'll need life insurance later on in life. Well, the industry basically creates its own market by telling you that. If you have whole life insurance instead of buying term and investing the difference, you probably WILL need life insurance when you're 90 BECAUSE YOU'LL HAVE NO MONEY SAVED!

T November 22 2009 3:55 PM

If you live 31 years after you buy a 30-year term policy, then even 30-year term insurance was temporary. What do you do if the market tanks, your term runs out, and/or you're uninsurable. What if you listened to Dave on the radio the other day when he said "don't buy Long Term Care insurance in your 50's because statistically nobody uses it until their 60's," you get denied for it when you try to buy it in your 60's (it's not the easiest insurance to get approved for by any means), and you end up self-insuring for your LTC with the money that you planned to self-insure your life insurance. People are living longer than ever, our biggest killers aren't killing us any more but they are disabling us, and Long Term Care can easily drain an outrageous amount of money between what Medicare and Medicaid cover. "Buy term and invest the difference" works great when the market is soaring, but there are some huge risks involved.

David Hamilton November 19 2009 3:57 PM

What happends after the term life policy expires? Where does the money go?

Dave November 02 2009 2:42 PM

After taking Financial Peace University, I investigated several insurance companies and decided to let Zander Insurance handle my insurance needs. When they told me that I could get better levels of insurance I wanted to see what they could do. I have better insurance, better service, and from a company that I can now trust. After meeting with them I will let them handle my insurance needs going forward.

Kevin Eldridge November 01 2009 1:23 AM

You are 100% correct on your assessment of term vs. whole life. And you are correct, you have to read the contract and know the limitations of it. Get term insurance when you are young and just hold onto it.

Al Cordera October 30 2009 9:36 PM

I understand the concept of needing only term insurance. What happens when the term runs out and you are 10, 15 or 30 years older? Won't the cost of insurance be extremely expensive or maybe you have been diagnosed with a dreaded disease and will no longer qualify for life insurance? I believe you need life insurance in place on the day you die and term insurance doesn't always work that way. Buy term and invest the rest is a great theory...but there are many people that will not live by that rule!

Kim October 30 2009 6:49 AM