Dave Ramsey: Term vs Whole Life Insurance #shorts

Added: 2026-05-22

[00:00:00]Uh, number one, you have said on your website that term insurance is the best and the only kind of product people should buy in all instances when they need life insurance.

[00:00:10]And what I can tell you is that we do not recommend life whole life insurance across the boards. We recommend life insurance situationally. There's no two needs, no two situations that are pervasively similar.

[00:00:27]Well, I I you're you're an insurance agent, obviously, and um the I disagree when you say there are no two instances that are the same. There are basic principles of mathematics and basic principles of personal finance that are always the same.

[00:00:46]For instance, I would say to you, there is never a time that you would use a credit card. Mhm. You can't say that there you can't convince me that there's certain times you should use a credit card. They suck, they're a bad product, they don't work. And I think the same thing's true of whole life. Mhm. It involves a lot >> would you put extra money into a policy to create cash value if the cash value is has no standard of excellence at all on the rate of return?

[00:01:12]>> you think term insurance is so cheap?

[00:01:14]Because term insurance does not have or maintain a legal reserve of fixed to it.

[00:01:18]Now, it's a 20-year level term 20-year level term insurance is about 1/5 or about 1/20 the cost, about 5% the cost of the same amount of the the same amount of whole life is. From an actuarial point of view, whole life is considered to be a product priced indefinitely that does not have >> it never stays in place indefinitely.

[00:01:38]That depends upon the person, and that depends upon the situation. The All the all the research shows that they cash them out like crazy. The vast majority do. But let's just pretend you kept it for your whole life. Why the why the flip did you need it for your whole life? How about something's called estate taxes? There are people who do when they die uh see their family incur substantial, substantial financial loss.

[00:02:00]>> And so in order to cover estate taxes, I need to get ripped off for 60 years in a horrible financial product. That you die with whole life life insurance, your beneficiary gets paid only the face amount after you've paid 20 times more for the policy. If it is if the policy is arranged properly, a person can receive not just the face amount of the policy, but in addition, they can receive the value of the cash account.

[00:02:25]Not unless it's an AB universal, in which case you paid more for it to start with. Are you talking about paid up additions? There is a Do you ever have something called the fifth dividend option? The bottom line is at the end of the day, the people don't get the cash value. You pay 20 times more and the cash value is not added on. Now, I mean, you can look at every major whole life company that's out there and you tell me they get their cash values. It's a piece of crap.