Dave Ramsey on Life Insurance: Buy Term vs Cash Value (response video)

This is a response to Dave Ramsey's video on Life Insurance (http://www.youtube.com/watch?v=gvjir8yxPUI), and compares the real difference between a buy term and invest the difference strategy (that Dave recommends) and the kind of maximum funded policies we create for our clients every day.

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[vicclement]

Wow. For some dyed in the wool, buy term and invest the difference zealots, you might have just as well posted: κατάλληλα δομημένο μέγιστη χρηματοδότηση because it seems that they just can't get their heads around what you're saying. The curious should paste that in at google translate ;)

[missedfortune]

@vicclement Well said. In greek no less! :)

[potts80]

In defense of Dave Ramsey. First is advice is for mostly middle class families. Middle class families have to have common sense vehicles to help adequatly protect their families. Your illustratuion has a lot of trickery to it. So you're selling that a $400k 20yr term policy @ $220 a year and $18.33 a month vs your UVL whole life policy $588k @ $6,000 @ annualy @ $500 a month is a good deal for a middle class person? Why didnt you guys break that down in your Illustartion?

[missedfortune]

@potts80, A lot of trickery? Please show with specific times in the video where we use ANY trickery. Your one argument isn't making any sense to me. At 2:18 we very clearly outline ALL the numbers (using Dave's guidelines of 15% of income), and account for every dollar being spent. The end result is that the buy term and invest the difference strategy falls far short of ours (which is an IUL, not what you incorrectly called a UVL Whole Life Policy).

[DiceHunt]

It seems that you ACCIDENTALLY FAILED to mention that on Universal Life, UL, you can 'skip' a pmt, and your CV will pay it for you..eventually eroding your "savings."

You also ABSOLUTELY failed to tell that the "interest" in the UV policy is 1) a selling key, 2) NOT GUARANTEED, BUT PROJECTED!

It's so EASY to see that YOU are an insurance SALESMAN who is out to sell CV insurance in order to "rob people bllind" and make a nice FAT commission for YOU and to hell with them!

[missedfortune]

@DiceHunt -Also, there ARE guarantees, if you understood how indexed ULs work you would know this. The floors are 100% guaranteed. What are the guarantees of mutual funds? How come you're not attacking the mutual funds that lost 40-50% in one year? Mutual funds are BARELY back to break even from where they were10 years ago, while our strategies have nearly DOUBLED their money in that time, even when factoring costs. Again, what is your response to this?

[vicclement]

@DiceHunt - in 2012, companies will have to disclose the hidden fees in their retirement plans. The public is about to find out how much they're actually paying in fat commissions and other charges on their mutual funds including the commissions that they pay when they "rebalance" their plan...robbing the blind is about to come to an end because the light is about to be shined on all the fees behind retirement plans funded with mutual funds.

[2mconsolidated]

I dare ANY term insurance zealot to beat (or even remotely compare) to my results over the last ten years. Using properly front loaded whole life + PUAs... it would require a mutual portfolio to CONSISTENTLY and GUARANTEED produce 11.5% annually just to match my results... and.... THAT doesn't even consider my FREE $2.0 million dollar death benefit which will care for my wife after I depart.

Not to mention...EVERY $ I put into this method, I can actually USE (or pull out) whenever I want.

[drkpaladin777]

A person making 40k and saving 5800 a year will be doing so (hopefully) tax free through a 401k or IRA. This completely changes the math coupled with Monthly savings earning interest as opposed to Yearly savings, plus the assumption here is that a person stops saving for retirement at the same time that they stop paying for their initial term life insurance. Yes, a person who starts saving for retirement at 40, stops at 52, and keeps working until 65 be in trouble by age 77(No more characters)

[TrevorKEdwards]

@DiceHunt You are ignorant, but I don't care it's your loss! Look at what it does, not what it is!!

[potts80]

You still cant justify a middle class family to pay for a $400k 20 year level term policy @ $220/yr and $18.33 a month vs a IUL policy with a $588k death benefeit @ $6k/yr and $500 a month. Which one do you think middle class families can afford? Invest the difference can be added to a work 401k plan adding 15% which is deducted before tax. This is more affordable to most families vs what you guys are pushing. Can you at least admit that? Also which vehicle pays most commision to agents?

[lsmisscute]

By the way, if you wanted to be a salesmen, Cash Value insurance is probably the worst thing you'd want to sell because all of the stigma with it. If it was truly an awful product, why do banks buy this by the truckload? Read the book Pirates of Manhattan. Banks consider it their Tier-1 (their best) asset. Every year bank-owned life insurance goes on sale 1/1, it's fully accounted for by 1/2. Yes, companies do sell out of bank-owned insurance for sale... Sorry, just the facts.

[lsmisscute]

@DiceHunt It's pretty clear you're a blind Dave Ramsey fan, so I'll help you. While they're not guaranteed, neither is your Ramsey "Good" Mutual Fund. They are projected, but so is your 8.5% taxable. While I think the guys in the video are still missing the point of permanent insurance, you haven't added anything, so you rely on the insults you learned from Dave's radio show.... Either contribute some intellectual argument or you'll continually get owned. Sorry.